**Exhibit 10.30**

**Property Excess of Loss Reinsurance ContractEffective: January 1, 2006**

**Issued to**

Safety Insurance CompanyandSafety Indemnity Insurance Company both of Boston, Massachusetts

 

 

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**Table ofContents**
| Article    | ** ** | ** **                      | ** ** | **Page**   |
|------------|------------|---------------------------------|------------|------------|
| ** ** | ** ** | ** **                      | ** ** | ** ** |
|       |       | Classes of Business Reinsured   |       |       |
|       |       |                            |       |       |
| II         |       | Commencement and Termination    |       |       |
|       |       |                            |       |       |
| III        |       | Territory (BRMA 51A)            |       | 2          |
|       |       |                            |       |       |
| IV         |       | Exclusions                      |       | 2          |
|       |       |                            |       |       |
| V          |       | Retention and Limit             |       | 3          |
|       |       |                            |       |       |
| VI         |       | Reinstatement                   |       | 4          |
|       |       |                            |       |       |
| VII        |       | Definitions                     |       | 5          |
|       |       |                            |       |       |
| VIII       |       | Loss Occurrence                 |       | 6          |
|       |       |                            |       |       |
| IX         |       | Loss Notices and Settlements    |       | 9          |
|       |       |                            |       |       |
| X          |       | Salvage and Subrogation         |       | 9          |
|       |       |                            |       |       |
| XI         |       | Reinsurance Premium             |       | 9          |
|       |       |                            |       |       |
| XII        |       | Late Payments                   |       | 10         |
|       |       |                            |       |       |
| XIII       |       | Offset (BRMA 36C)               |       | 11         |
|       |       |                            |       |       |
| XIV        |       | Access to Records (BRMA 1D)     |       | 11         |
|       |       |                            |       |       |
| XV         |       | Liability of the Reinsurer      |       | 12         |
|       |       |                            |       |       |
| XVI        |       | Net Retained Lines (BRMA 32B)   |       | 12         |
|       |       |                            |       |       |
| XVII       |       | Errors and Omissions (BRMA 14F) |       | 12         |
|       |       |                            |       |       |
| XVIII      |       | Currency (BRMA 12A)             |       | 12         |
|       |       |                            |       |       |
| XIX        |       | Taxes (BRMA 50B)                |       | 13         |
|       |       |                            |       |       |
| XX         |       | Federal Excise Tax              |       | 13         |
|       |       |                            |       |       |
| XXI        |       | Unauthorized Reinsurers         |       | 13         |
|       |       |                            |       |       |
| XXII       |       | Insolvency                      |       | 14         |
|       |       |                            |       |       |
| XXIII      |       | Arbitration                     |       | 15         |
|       |       |                            |       |       |
| XXIV       |       | Service of Suit (BRMA 49C)      |       | 16         |
|       |       |                            |       |       |
| XXV        |       | Agency Agreement                |       | 16         |
|       |       |                            |       |       |
| XXVI       |       | Governing Law (BRMA 71B)        |       | 16         |
|       |       |                            |       |       |
| XXVII      |       | Severability (BRMA 72E)         |       | 17         |
|       |       |                            |       |       |
| XXVIII     |       | Intermediary (BRMA 23A)         |       | 17         |
|       |       |                            |       |       |
|       |       | Schedule A                      |       |       |

 

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**Property Excess of Loss Reinsurance Contract**Effective: January1, 2006

**issued to**

**Safety Insurance Companyand Safety Indemnity Insurance Companyboth of Boston, Massachusetts (*hereinafter referred to collectively as the*“Company”)**

**by**

**The Subscribing Reinsurer(s) Executing the Interests and Liabilities Agreement(s)Attached Hereto *(hereinafter referred to as the*“Reinsurer”*)***

**Article I - Classes of Business Reinsured**

By this Contract the Reinsurer agrees to reinsure the excess liabilitywhich may accrue to the Company under its policies, contracts and binders ofinsurance or reinsurance (hereinafter called “policies”) in force on theeffective date hereof or issued or renewed on or after that date, andclassified by the Company as Fire, Allied Lines, Homeowners Multiple Peril(Section I only), Commercial Multiple Peril (Section I only) and Inland Marinebusiness, subject to the terms, conditions and limitations set forth herein andin Schedule A attached to and forming part of this Contract.

**Article II - Commencement and Termination**

A.**                     **ThisContract shall become effective at 12:01 a.m., Eastern Standard Time, January1, 2006, with respect to losses occurring at or after that time and date, andshall remain in force until 12:01 a.m., Eastern Standard Time, January 1, 2007.

B.                        Notwithstandingthe provisions of paragraph A above, the Company may terminate a SubscribingReinsurer’s percentage share in this Contract at any time by giving writtennotice to the Subscribing Reinsurer in the event any of the followingcircumstances occur:

1.                         TheSubscribing Reinsurer’s policyholders’ surplus at the inception of thisContract has been reduced by more than 20.0% of the amount of surplus 12 monthsprior to that date; or

2*.**                        *TheSubscribing Reinsurer’s policyholders’ surplus at any time during the term ofthis Contract has been reduced by more than 20.0% of the amount of surplus atthe date

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of the****SubscribingReinsurer’s most recent financial statement filed with regulatory authoritiesand available to the public as of the inception of this Contract; or

3.                         TheSubscribing Reinsurer’s A.M. Best’s rating has been assigned or downgradedbelow A- and/or Standard & Poor’s rating has bean assigned or downgradedbelow BBB+; or

4.                         TheSubscribing Reinsurer has become merged with, acquired by or controlled by anyother company, corporation or individual(s) not controlling the SubscribingReinsurer’s operations previously; or

5.                         AState Insurance Department or other legal authority has ordered the SubscribingReinsurer to cease writing business; or

6.                         TheSubscribing Reinsurer has become insolvent or has been placed into liquidationor receivership (whether voluntary or involuntary) or proceedings have beeninstituted against the Subscribing Reinsurer for the appointment of a receiver,liquidator, rehabilitator, conservator or trustee in bankruptcy, or other agentknown by whatever name, to take possession of its assets or control of itsoperations; or

7.                         TheSubscribing Reinsurer has reinsured its entire liability under this Contractwithout the Company’s prior written consent; or

8.                         TheSubscribing Reinsurer has ceased assuming new and renewal property treatyreinsurance business.

C.                        TheReinsurer shall have no liability hereunder with respect to losses occurringafter****the effective date oftermination.

**Article III - Territory (BRMA 51A)**

The territorial limits of this Contract shall be identical with thoseof the Company’s policies

**Article IV - Exclusions**

This Contract does notapply to and specifically excludes the following

1.                         Lossor damage occasioned by war, invasion, hostilities, acts of foreign enemies,civil war, rebellion, insurrection, military or usurped power, martial law orconfiscation by order of any government or public authority, but not excludingloss or damage which would be covered under a standard form of policycontaining a standard war exclusion clause.

2.                         Nuclearrisks as defined in the “Nuclear Incident Exclusion Clause - Physical Damage -Reinsurance” attached to and forming part of this Contract.

3.                         Liabilityas a member, subscriber or reinsurer of any Pool, Syndicate or Association; andany combination of insurers or reinsurers formed for the purpose of covering

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specific perils, specific classes of business or forthe purpose of insuring risks located in specific geographical areas; but thisexclusion shall not apply to FAIR Plans or to SIR Pool, Franklin Pool, CoastalPools, Beach Plans or similar plans, however styled. It is understood andagreed, however, that this reinsurance does not include any increase inliability to the Company resulting from (a) the inability of any otherparticipant in a FAIR Plan. SIR Pool, Franklin Pool, Coastal Pool, Beach Planor similar plan to meet its liability, or (b) any claim against such a FAIRPlan, SIR Pool, Franklin Pool, Coastal Pool, Beach Plan or similar plan, or anyparticipant therein, including the Company, whether by way of subrogation orotherwise, brought by or on behalf of any insolvency fund.

4.                         Financialguarantee and insolvency.

5.                         Thirdparty liability.

6.                         Allliability of the Company arising by contract, operation of law, or otherwise,from its participation or membership, whether voluntary or involuntary, in anyinsolvency fund. “Insolvency fund” includes any guaranty fund, insolvency fund,plan, pool, association, fund or other arrangement, however denominated,established or governed, which provides for any assessment of or payment orassumption by the Company of part or all of any claim, debt, charge, fee orother obligation of an insurer, or its successors or assigns, which has beendeclared by any competent authority to be insolvent, or which is otherwisedeemed unable to meet any claim, debt, charge, fee or other obligation in wholeor in part.

7.                         Allclasses of business not specifically listed in the Classes of BusinessReinsured Article.

8.                         Reinsuranceassumed, except pro rata local agency reinsurance on specific risks.

9.                         Ex-gratiapayments.

10.                   Risksexcluded under the provisions of the “Total Insured Value Clause” attached toand forming part of this Contract.

11.                   Lossor liability excluded under the “Terrorism Exclusion Clause” attached to andforming part of this Contract.

12.                   Lossand/or damage and/or costs and/or expenses arising from Seepage and/orPollution and/or Contamination, other than contamination from Smoke Damage.Nevertheless, this exclusion does not preclude any payment of the cost of theremoval of debris of property damaged by a loss otherwise covered hereunder,but subject always to a limit of 25.0% of the Company’s property loss under theoriginal policy.

**Article V - Retention and Limit**

A.                      Asrespects each excess layer of reinsurance coverage provided by this Contract,the Company shall retain and be liable for the first amount of ultimate netloss, shown as “Company’s Retention” for that excess layer in Schedule Aattached hereto, as respects

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each risk, each loss. The Reinsurer shall then be liable, as respectseach excess layer, for the amount by which such ultimate net loss exceeds theCompany’s applicable retention, but the liability of the Reinsurer under eachexcess layer shall not exceed the amount, as respects each risk, each loss,shown as “Reinsurer’s Per Risk Limit” for that excess layer in Schedule Aattached hereto, nor shall it exceed the amount, shown as “Reinsurer’s PerOccurrence Limit” for that excess layer in Schedule A attached hereto, asrespects any one loss occurrence for the contract year under consideration.

B.                        TheCompany shall be the sole judge of what constitutes “one risk,” except that inno event shall a building and its contents be considered more than one risk.

C.                        TheCompany shall be permitted to carry facultative reinsurance, recoveries underwhich shall inure to the benefit of this Contract.

**Article VI - Reinstatement**

A.                      Inthe event all or any portion of the reinsurance under any excess layer ofreinsurance coverage provided by this Contract is exhausted by loss, the amountso exhausted shall be reinstated immediately from the time the loss occurshereon.

1.                         Asrespects the First Excess Layer:

a.                          Forthe first and second amount, shown as “Reinsurer’s Per Risk Limit” for thatexcess layer in Schedule A attached hereto, of ultimate net loss so reinstated,the Company shall pay no additional premium.

b.                         Forthe third amount, shown as “Reinsurer’s Per Risk Limit” for that excess layerin Schedule A attached hereto, of ultimate net loss so reinstated, the Companyagrees to pay additional premium equal to the product of the following:

The percentage of the per risk limit for the excesslayer reinstated (based on the loss paid by the Reinsurer under that excesslayer); times

ii.                         Theearned reinsurance premium for the excess layer reinstated for the term of thisContract (exclusive of reinstatement premium).

2.                         Asrespects the Second Excess Layer:

a.                          Forthe first amount, shown as “Reinsurer’s Per Risk Limit” for that excess layerin Schedule A attached hereto, of ultimate net loss so reinstated, the Companyshall pay no additional premium.

b.                         Forthe second amount, shown as “Reinsurer’s Per Risk Limit” for that excess layerin Schedule A attached hereto, of ultimate net loss so reinstated, the Companyagrees to pay additional premium equal to the product of the following:

The percentage of the per risk limit for the excesslayer reinstated (based on the loss paid by the Reinsurer under that excesslayer); times

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ii.                         Theearned reinsurance premium for the excess layer reinstated for the term of thisContract (exclusive of reinstatement premium).

3.                         Asrespects the Third Excess Layer, for each amount so reinstated, the Companyagrees to pay additional premium equal to the product of the following:

a.                          Thepercentage of the per risk limit for the excess layer reinstated (based on theloss paid by the Reinsurer under that excess layer); times

b.                         Theearned reinsurance premium for the excess layer reinstated for the term of thisContract (exclusive of reinstatement premium).

B.                        Wheneverthe Company requests payment by the Reinsurer of any loss under any excesslayer hereunder, the Company shall submit a statement to the Reinsurer ofreinstatement premium due the Reinsurer for that excess layer. If the earnedreinsurance premium for any excess layer for the term of this Contract has notbeen finally determined as of the date of any such statement, the calculationof reinstatement premium due for that excess layer shall be based on the annualdeposit premium for that excess layer and shall be readjusted when the earnedreinsurance premium for that excess layer for the term of this Contract hasbeen finally determined. Any reinstatement premium shown to be due theReinsurer for any excess layer as reflected by any such statement (less priorpayments, if any, for that excess layer) shall be payable by the Companyconcurrently with payment by the Reinsurer of the requested loss for thatexcess layer. Any return reinstatement premium shown to be due the Companyshall be remitted by the Reinsurer as promptly as possible after receipt andverification of the Company’s statement.

C.                        Notwithstandinganything stated herein, the liability of the Reinsurer under any excess layerof reinsurance coverage provided by this Contract shall not exceed any of thefollowing:

1.                         Theamount, shown as “Reinsurer’s Per Risk Limit” for that excess layer in ScheduleA attached hereto, as respects each risk, each loss; or

2.                         Theamount, shown as “Reinsurer’s Per Occurrence Limit” for that excess layer inSchedule A attached hereto, as respects loss or losses arising out of any oneloss occurrence; or

3.                         Theamount, shown as “Reinsurer’s Term Limit” for that excess layer in Schedule Aattached hereto, in all during the term of this Contract.

**Article VII - Definitions**

A.                      “Ultimatenet loss” as used herein is defined as the sum or sums (including loss inexcess of policy limits, extra contractual obligations, and all loss adjustmentexpense, as hereinafter defined) paid or payable by the Company in settlementof claims and in satisfaction of judgments rendered on account of such claims,after deduction of all salvage, all recoveries and all claims on inuring insuranceor reinsurance, whether collectible or not. Nothing herein shall be construedto mean that losses under this Contract are not recoverable until the Company’sultimate net loss has been ascertained.

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B.                        “Lossin excess of policy limits” and “extra contractual obligations” as used hereinshall be defined as follows:

“Loss in excess of policy limits” shall mean 90.0% ofany amount paid or payable by the Company in excess of its policy limits, butotherwise within the terms of its policy, such loss in excess of the Company’spolicy limits having been incurred because of, but not limited to, failure bythe Company to settle within the policy limits or by reason of the Company’salleged or actual negligence, fraud or bad faith in rejecting an offer of settlementor in the preparation of the defense or in the trial of an action against itsinsured or reinsured or in the preparation or prosecution of an appealconsequent upon such an action.

2                            “Extracontractual obligations” shall mean 90.0% of any punitive, exemplary,compensatory or consequential damages paid or payable by the Company, notcovered by any other provision of this Contract and which arise from thehandling of any claim on business subject to this Contract, such liabilitiesarising because of, but not limited to, failure by the Company to settle withinthe policy limits or by reason of the Company’s alleged or actual negligence,fraud or bad faith in rejecting an offer of settlement or in the preparation ofthe defense or in the trial of any action against its insured or reinsured orin the preparation or prosecution of an appeal consequent upon such an action.An extra contractual obligation shall be deemed, in all circumstances, to haveoccurred on the same date as the loss covered or alleged to be covered underthe policy.

Notwithstanding anything stated herein, this Contract shall not applyto any loss in excess of policy limits or any extra contractual obligationincurred by the Company as a result of any fraudulent and/or criminal act byany officer or director of the Company acting individually or collectively orin collusion with any individual or corporation or any other organization orparty involved in the presentation, defense or settlement of any claim coveredhereunder.

Savings Clause (Applicable only if the Subscribing Reinsurer isdomiciled in the State of New York): In no event shall coverage be provided tothe extent that such coverage is not permitted under New York law.

C.                        “Lossadjustment expense” as used herein shall mean expenses assignable to theinvestigation, appraisal, adjustment, settlement, litigation, defense and/orappeal of specific claims, regardless of how such expenses are classified forstatutory reporting purposes. Loss adjustment expense shall include, but not belimited to, interest on judgments, expenses of outside adjusters, anddeclaratory judgment expenses or other legal expenses and costs incurred inconnection with coverage questions and legal actions connected thereto, butshall not include office expenses or salaries of the Company’s regularemployees not classified as loss adjusters.

**Article VIII - Loss Occurrence**

A.                      Theterm “loss occurrence” shall mean the sum of all individual losses directlyoccasioned by any one disaster, accident or loss or series of disasters,accidents or losses arising out of one event which occurs within the area ofone state of the United States or province of

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Canada and states or provinces contiguous thereto and to one another.However, the duration and extent of any one “loss occurrence” shall be limitedto all individual losses sustained by the Company occurring during any periodof 168 consecutive hours arising out of and directly occasioned by the sameevent, except that the term “loss occurrence” shall be further defined asfollows:

1.                         Asregards windstorm, hail, tornado, hurricane, cyclone, including ensuingcollapse and water damage, all individual losses sustained by the Companyoccurring during any period of 72 consecutive hours arising out of and directlyoccasioned by the same event. However, the event need not be limited to onestate or province or states or provinces contiguous thereto.

2.                         Asregards riot, riot attending a strike, civil commotion, vandalism and maliciousmischief, all individual losses sustained by the Company occurring during anyperiod of 72 consecutive hours within the area of one municipality or countyand the municipalities or counties contiguous thereto arising out of anddirectly occasioned by the same event. The maximum duration of 72 consecutivehours may be extended in respect of individual losses which occur beyond such72 consecutive hours during the continued occupation of an assured’s premisesby strikers, provided such occupation commenced during the aforesaid period.

3.                         Asregards earthquake (the epicentre of which need not necessarily be within theterritorial confines referred to in paragraph A of this Article) and firefollowing directly occasioned by the earthquake, only those individual firelosses which commence during the period of 168 consecutive hours may beincluded in the Company’s “loss occurrence.”

4.                         Asregards “freeze,” only individual losses directly occasioned by collapse,breakage of glass and water damage (including, but not limited to, those causedby bursting frozen pipes and tanks) may be included in the Company’s “lossoccurrence.”

5.                         Asregards firestorms, brush fires and any other fires or series of fires,irrespective of origin (except as provided in subparagraphs 2 and 3 above),which spread through trees, grassland or other vegetation, all individuallosses sustained by the Company which occur during any period of 168consecutive hours within 150-mile radius of any one fixed point selected by theCompany may be included in the Company’s “loss occurrence.” However, anindividual loss subject to this subparagraph cannot be included in more thanone “loss occurrence.”

B.                        Exceptfor those “loss occurrences,” referred to in subparagraphs 1 and 2 of paragraphA above, the Company may choose the date and time when any such period ofconsecutive hours commences, provided that it is not earlier than the date andtime of the occurrence of the first recorded individual loss sustained by theCompany arising out of that disaster, accident or loss, and provided that onlyone such period of 168 consecutive hours shall apply with respect to one event.

C.                        Asrespects those “loss occurrences” referred to in subparagraphs 1 and 2 ofparagraph A above, if the disaster, accident or loss occasioned by the event isof greater duration than 72 consecutive hours, then the Company may divide thatdisaster, accident or loss into two or more “loss occurrences,” provided no twoperiods overlap and no individual loss is

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included in more than one such period and provided that no periodcommences earlier than the date and time of the occurrence of the firstrecorded individual loss sustained by the Company arising out of that disaster,accident or loss.

D.                       Noindividual losses occasioned by an event that would be covered by 72 hoursclauses may be included in any “loss occurrence” claimed under the 168 hoursprovision.

E.                         Anydate change, including leap-year calculations, shall not in and of itself beregarded as an event for purposes of this Contract.

This includes any loss, damage, cost, claim or expense,whether preventative, remedial or otherwise, directly or indirectly arising outof or relating to:

a.                          Thecalculation, comparison, differentiation, sequencing or processing of datainvolving a date change, including leap-year calculations, by any computersystem, hardware, program or software and/or any microchip, integrated circuitor similar device in computer equipment or non-computer equipment, whether theproperty of the insured or not: or

b.                         Anychange, alteration or modification involving a date change, including leap-yearcalculations, to any such computer system, hardware, program or software or anymicrochip, integrated circuit or similar device in computer equipment ornon-computer equipment, whether the property of the insured or not.

This subparagraph shall apply regardless of any othercause or event that contributes concurrently or in any sequence to the loss,damage, cost, claim or expense.

However, this subparagraph shall not apply as respectsphysical damage occurring at the insured’s premises arising out of the perilscovered under this Contract.

2.                         Notwithstandingsubparagraph 1 above, this Contract shall not cover any costs and expenses,whether preventative, remedial or otherwise, arising out of or relating tochange, alteration or modification of any computer system, hardware, program orsoftware or any microchip, integrated circuit or similar device in computer ornon-computer equipment, whether the property of the insured or not.

F.                         Lossesarising, directly or indirectly, out of:

1.                         Lossof, alteration of, or damage to;

or

2.                         Areduction in the functionality, availability or operation of

A computer system, hardware, program, software, data,information repository, microchip, integrated circuit or similar device incomputer equipment or non-computer equipment, whether the property of thepolicyholder of the Company or not, do not in and of themselves constitute anevent unless arising out of one or more of the following perils:

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Fire, lightning, explosion, aircraft or vehicle impact,falling objects, windstorm, hail, tornado, cyclone, hurricane, earthquake,volcano, tsunami, flood, freeze or weight of snow.

**Article IX - Loss Notices and Settlements**

A.                      Whenevera loss sustained by the Company appears likely to result in a claim hereunder,the Company shall notify the Reinsurer, and the Reinsurer shall have the rightto participate in the adjustment of the loss at its own expense.

B.                        Allloss settlements made by the Company, provided they are within the terms ofthis Contract, shall be binding upon the Reinsurer, and the Reinsurer agrees topay all amounts for which it may be liable upon receipt of reasonable evidenceof the amount paid (or scheduled to be paid) by the Company.

**Article X - Salvage and Subrogation**

The Reinsurer shall be credited with salvage (i.e., reimbursementobtained or recovery made by the Company, less the actual cost, excludingsalaries of officials and employees of the Company and sums paid to attorneysas retainer, of obtaining such reimbursement or making such recovery) onaccount of claims and settlements involving reinsurance hereunder. Salvagethereon shall always be used to reimburse the excess carriers in the reverseorder of their priority according to their participation before being used inany way to reimburse the Company for its primary loss. The Company herebyagrees to enforce its rights to salvage or subrogation relating to any loss, apart of which loss was sustained by the Reinsurer, and to prosecute all claimsarising out of such rights.

**Article XI - Reinsurance Premium**

A.                      Aspremium for each excess layer of reinsurance coverage provided by thisContract, the Company shall pay the Reinsurer the greater of the following:

1.                         Theamount, shown as “Annual Minimum Premium” for that excess layer in Schedule Aattached hereto (or a pro rata portion thereof if a Subscribing Reinsurer’sshare under that excess layer is terminated in accordance with the provisionsof this Contract); or

2.                         Thepercentage, shown as “Premium Rate” for that excess layer in Schedule Aattached hereto, of the Company’s net earned premium for the term of thisContract.

B.                        TheCompany shall pay the Reinsurer an annual deposit premium for each excess layerof the amount, shown as “Annual Deposit Premium” for that excess layer inSchedule A attached hereto, in four equal installments of the amount, shown as “QuarterlyDeposit Premium” for that excess layer in Schedule A attached hereto, onJanuary 1, April 1, July 1 and October 1 of 2006. In the event a SubscribingReinsurer’s share under any excess

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layer hereof is terminated, no quarterly deposit premium installmentfor such layer(s) shall be due to such Subscribing Reinsurer after theeffective date of termination.

C.                        Within60 days after the termination or expiration of this Contract, the Company shallprovide a report to the Reinsurer setting forth the premium due hereunder foreach excess layer, computed in accordance with paragraph A, and any additionalpremium due the Reinsurer or return premium due the Company for each such excesslayer shall be remitted promptly.

D.                       “Netearned premium” as used herein is defined as gross earned premium of theCompany for the classes of business reinsured hereunder, less the earnedportion of premiums ceded by the Company for reinsurance which inures to thebenefit of this Contract. For purposes of calculating net earned premium, 90.0%of Homeowners Multiple Peril and 80.0% of Commercial Multiple Peril total basicpolicy premium on indivisible premium policies shall be considered subjectpremium.

**Article XII - Late Payments**

A.                      Theprovisions of this Article shall not be implemented unless specificallyinvoked, in writing, by one of the parties to this Contract.

B.                        Inthe event any premium, loss or other payment due either party is not receivedby the intermediary named in the intermediary Article (BRMA 23A) (hereinafterreferred to as the “Intermediary”) by the payment due date, the party to whompayment is due may, by notifying the Intermediary in writing, require thedebtor party to pay, and the debtor party agrees to pay, an interest penalty onthe amount past due calculated for each such payment on the last business dayof each month as follows:

1.                         Thenumber of full days which have expired since the due date or the last monthlycalculation, whichever the lesser; times

2.                         1/365thsof the six-month United States Treasury Bill rate as quoted in *The Wall Street Journal*on the firstbusiness day of the month for which the calculation is made; times

3.                         Theamount past due, including accrued interest

It is agreed that interest shall accumulate until payment of theoriginal amount due plus interest penalties have been received by theIntermediary.

C.                        Theestablishment of the due date shall, for purposes of this Article, bedetermined as follows:

1.                         Asrespects the payment of routine deposits and premiums due the Reinsurer, thedue date shall be as provided for in the applicable section of this Contract.In the event a due date is not specifically stated for a given payment, itshall be deemed due 30 business days after the date of transmittal by the Intermediaryof the initial billing for each such payment.

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2.                         Anyclaim or loss payment due the Company hereunder shall be deemed due 30 businessdays after the proof of loss or demand for payment is transmitted to theReinsurer. If such loss or claim payment is not received within the 30 businessdays, interest will accrue on the payment or amount overdue in accordance withparagraph B above, from the date the proof of loss or demand for payment wastransmitted to the Reinsurer.

3.                         Asrespects any payment, adjustment or return due either party not otherwiseprovided for in subparagraphs 1 and 2 of this paragraph, the due date shall beas provided for in the applicable section of this Contract. In the event a duedate is not specifically stated for a given payment, it shall be deemed due 30business days following transmittal of written notification that the provisionsof this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shallbe deemed paid upon receipt by the Intermediary.

D.                       Nothingherein shall be construed as limiting or prohibiting a Subscribing Reinsurerfrom contesting the validity of any claim, or from participating in the defenseof any claim or suit, or prohibiting either party from contesting the validityof any payment or from initiating any arbitration or other proceeding inaccordance with the provisions of this Contract. If the debtor party prevailsin an arbitration or other proceeding, then any interest penalties duehereunder on the amount in dispute shall be null and void. If the debtor partyloses in such proceeding, then the interest penalty on the amount determined tobe due hereunder shall be calculated in accordance with the provisions setforth above unless otherwise determined by such proceedings. If a debtor partyadvances payment of any amount it is contesting, and proves to be correct inits contestation, either in whole or in part, the other party shall reimbursethe debtor party for any such excess payment made plus interest on the excessamount calculated in accordance with this Article.

E.                         Interestpenalties arising out of the application of this Article that are $100 or lessfrom any party shall be waived unless there is a pattern of late paymentsconsisting of three or more items over the course of any 12-month period.

**Article XIII - Offset(BRMA 36C)**

The Company and the Reinsurer shall have the right to offset anybalance or amounts due from one party to the other under the terms of this Contract.The party asserting the right of offset may exercise such right any timewhether the balances due are on account of premiums or losses or otherwise.

**Article XIV - Access toRecords (BRMA**1D)

The Reinsurer or its designated representatives shall have access atany reasonable time to all records of the Company which pertain in any way tothis reinsurance.

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**Article XV - Liability ofthe Reinsurer**

A.**                     **Theliability of the Reinsurer shall follow that of the Company in every case andbe subject in all respects to all the general and specific stipulations,clauses, waivers and modifications of the Company’s policies and anyendorsements thereon. However, in no event shall this be construed in any wayto provide coverage outside the terms and conditions set forth in thisContract.

B.                        Nothingherein shall in any manner create any obligations or establish any rightsagainst the Reinsurer in favor of any third party or any persons not parties tothis Contract.

**Article XVI - NetRetained Lines (BRMA 32B)**

A.                      ThisContract applies only to that portion of any policy which the Company retainsnet for its own account, and in calculating the amount of any loss hereunderand also in computing the amount or amounts in excess of which this Contractattaches, only loss or losses in respect of that portion of any policy whichthe Company retains net for its own account shall be included.

B.                        Theamount of the Reinsurer’s liability hereunder in respect of any loss or lossesshall not be increased by reason of the inability of the Company to collectfrom any other reinsurer(s), whether specific or general, any amounts which mayhave become due from such reinsurer(s), whether such inability arises from theinsolvency of such other reinsurer(s) or otherwise.

**Article XVII - Errors andOmissions (BRMA 14F)**

Inadvertent delays, errors or omissions made in connection with thisContract or any transaction hereunder shall not relieve either party from anyliability which would have attached had such delay, error or omission notoccurred, provided always that such error or omission is rectified as soon aspossible after discovery.

**Article XVIII - Currency(BRMA 12A)**

A.**                     **Wheneverthe word “Dollars” or the “$” sign appears in this Contract, they shall beconstrued to mean United States Dollars and all transactions under thisContract shall be in United States Dollars.

B.                        Amountspaid or received by the Company in any other currency shall be converted toUnited States Dollars at the rate of exchange at the date such transaction isentered on the books of the****Company.

12

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**Article XIX - Taxes (BRMA50B)**

In consideration of the terms under which this Contract is issued, theCompany will not claim a deduction in respect of the premium hereon when makingtax returns, other than income or profits tax returns, to any state orterritory of the United States of America or the District of Columbia.

**Article XX - FederalExcise Tax**

A.**                     **TheReinsurer has agreed to allow for the purpose of paying the Federal Excise Taxthe applicable percentage of the premium payable hereon as imposed underSection 4371 of the Internal Revenue Code to the extent such premium is subjectto the Federal Excise Tax.

B.                        Inthe event of any return of premium becoming due hereunder the Reinsurer willdeduct the applicable percentage from the return premium payable hereon and theCompany or its agent should take steps to recover the tax from the UnitedStates Government.

**Article XXI -Unauthorized Reinsurers**

A.**                     **Ifthe Reinsurer is unauthorized in any state of the United States of America or theDistrict of Columbia, the Reinsurer agrees to fund its share of the Company’sceded United States outstanding loss and loss adjustment expense reserves(including all case reserves plus any reasonable amount estimated to beunreported from known loss occurrences) by:

1.                         Clean,irrevocable and unconditional letters of credit issued and confirmed, ifconfirmation is required by the insurance regulatory authorities involved, by abank or banks meeting the NAIC Securities Valuation Office credit standards forissuers of letters of credit and acceptable to said insurance regulatoryauthorities; and/or

2.                         Escrowaccounts for the benefit of the Company; and/or

**3.****                        Cashadvances;**

if, without such funding, a penalty would accrue to the Company on anyfinancial statement it is required to file with the insurance regulatoryauthorities involved. The Reinsurer, at its sole option, may fund in other thancash if its method and form of funding are acceptable to the insuranceregulatory authorities involved.

B.                        Withregard to funding in whole or in part by letters of credit, it is agreed thateach letter of credit will be in a form acceptable to insurance regulatoryauthorities involved, will be issued for a term of at least one year and willinclude an “evergreen clause,” which automatically extends the term for atleast one additional year at each expiration date unless written notice ofnon-renewal is given to the Company not less than 30 days prior to saidexpiration date. The Company and the Reinsurer further agree, notwithstandinganything to the contrary in this Contract, that said letters of credit may bedrawn upon by the Company or

13

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its successors in interest at any time, without diminution because ofthe insolvency of the Company or the Reinsurer, but only for one or more of thefollowing purposes:

1.                         Toreimburse itself for the Reinsurer’s share of losses and/or loss adjustmentexpense paid under the terms of policies reinsured hereunder, unless paid incash by the Reinsurer;

2.                         Toreimburse itself for the Reinsurer’s share of any other amounts claimed to bedue hereunder, unless paid in cash by the Reinsurer;

3.                         Tofund a cash account in an amount equal to the Reinsurer’s share of any cededoutstanding loss and loss adjustment expense reserves (including all case reservesplus any reasonable amount estimated to be unreported from known lossoccurrences) funded by means of a letter of credit which is under non-renewalnotice, if said letter of credit has not been renewed or replaced by theReinsurer 10 days prior to its expiration date;

4.                         Torefund to the Reinsurer any sum in excess of the actual amount required to fundthe Reinsurer’s share of the Company’s ceded outstanding loss and lossadjustment expense reserves (including all case reserves plus any reasonable amountestimated to be unreported from known loss occurrences), if so requested by theReinsurer.

In the event the amount drawn by the Company on any letter of credit isin excess of the actual amount required for B(1) or B(3), or in the caseof B(2), the actual amount determined to be due, the Company shall promptlyreturn to the Reinsurer the excess amount so drawn.

**Article XXII - Insolvency**

A.                      Inthe event of the insolvency of one or both of the reinsured companies, thisreinsurance shall be payable directly to the company or to its liquidator,receiver, conservator or statutory successor on the basis of the liability ofthe company without diminution because of the insolvency of the company orbecause the liquidator, receiver, conservator or statutory successor of thecompany has failed to pay all or a portion of any claim. It is agreed, however,that the liquidator, receiver, conservator or statutory successor of thecompany shall give written notice to the Reinsurer of the pendency of a claimagainst the company indicating the policy or bond reinsured which claim wouldinvolve a possible liability on the part of the Reinsurer within a reasonabletime after such claim is filed in the conservation or liquidation proceeding orin the receivership, and that during the pendency of such claim, the Reinsurermay investigate such claim and interpose, at its own expense, in the proceedingwhere such claim is to be adjudicated, any defense or defenses that it may deemavailable to the company or its liquidator, receiver, conservator or statutorysuccessor. The expense thus incurred by the Reinsurer shall be chargeable,subject to the approval of the Court, against the company as part of theexpense of conservation or liquidation to the extent of a pro rata share of thebenefit which may accrue to the company solely as a result of the defenseundertaken by the Reinsurer.

14

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B.                        Wheretwo or more reinsurers are involved in the same claim and a majority ininterest elect to interpose defense to such claim, the expense shall beapportioned in accordance with the terms of this Contract as though suchexpense had been incurred by the company.

C.                        Itis further understood and agreed that, in the event of the insolvency of one orboth of the reinsured companies, the reinsurance under this Contract shall bepayable directly by the Reinsurer to the company or to its liquidator, receiveror statutory successor, except as provided by Section 411B(a) of the New YorkInsurance Law or except (1) where this Contract specifically provides anotherpayee of such reinsurance in the event of the insolvency of the company or (2)where the Reinsurer with the consent of the direct insured or insureds hasassumed such policy obligations of the company as direct obligations of theReinsurer to the payees under such policies and in substitution for theobligations of the company to such payees.

**Article XXIII - Arbitration**

A.                      Asa condition precedent to any right of action hereunder, in the event of anydispute or difference of opinion hereafter arising with respect to thisContract, it is hereby mutually agreed that such dispute or difference ofopinion shall be submitted to arbitration. One Arbiter shall be chosen by theCompany, the other by the Reinsurer, and an Umpire shall be chosen by the two Arbitersbefore they enter upon arbitration, all of whom shall be active or retireddisinterested executive officers of insurance or reinsurance companies or Lloyd’sLondon Underwriters. In the event that either party should fail to choose anArbiter within 30 days following a written request by the other party to do so,the requesting party may choose two Arbiters who shall in turn choose an Umpirebefore entering upon arbitration. If the two Arbiters fail to agree upon theselection of an Umpire within 30 days following their appointment, the twoArbiters shall request the American Arbitration Association to appoint theUmpire. If the American Arbitration Association fails to appoint the Umpirewithin 30 days after it has been requested to do so, either party may request ajustice of a Court of general jurisdiction of the state in which thearbitration is to be held to appoint the Umpire.

B.                        Eachparty shall present its case to the Arbiters within 30 days following the dateof appointment of the Umpire. The Arbiters shall consider this Contract as anhonorable engagement rather than merely as a legal obligation and they arerelieved of all judicial formalities and may abstain from following the strictrules of law. The decision of the Arbiters shall be final and binding on bothparties; but failing to agree, they shall call in the Umpire and the decisionof the majority shall be final and binding upon both parties. Judgment upon thefinal decision of the Arbiters may be entered in any court of competent jurisdiction.

C.                        Ifmore than one reinsurer is involved in the same dispute, all such reinsurersshall constitute and act as one party for purposes of this Article andcommunications shall be made by the Company to each of the reinsurersconstituting one party, provided, however, that nothing herein shall impair therights of such reinsurers to assert several, rather than joint, defenses orclaims, nor be construed as changing the liability of the reinsurersparticipating under the terms of this Contract from several to joint.

D.                       Eachparty shall bear the expense of its own Arbiter, and shall jointly and equallybear with the other the expense of the Umpire and of the arbitration. In theevent that the two

15

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Arbiters are chosen by one party, as above provided, the expense of theArbiters, the Umpire and the arbitration shall be equally divided between thetwo parties.

E.                         Anyarbitration proceedings shall take place at a location mutually agreed upon bythe parties to this Contract, but notwithstanding the location of thearbitration, all proceedings pursuant hereto shall be governed by the law ofthe state in which the Company has its principal office.

**Article XXIV - Service of Suit (BRMA 49C)**

(Applicable if the Reinsurer is not domiciled in the United States ofAmerica, and/or is not authorized in any State, Territory or District of theUnited States where authorization is required by insurance regulatoryauthorities)

A.                      Itis agreed that in the event the Reinsurer fails to pay any amount claimed to bedue hereunder, the Reinsurer, at the request of the Company, will submit to thejurisdiction of a court of competent jurisdiction within the United States.Nothing in this Article constitutes or should be understood to constitute awaiver of the Reinsurer’s rights to commence an action in any court ofcompetent jurisdiction in the United States, to remove an action to a UnitedStates District Court, or to seek a transfer of a case to another court aspermitted by the laws of the United States or of any state in the United States.

B.                        Further,pursuant to any statute of any state, territory or district of the UnitedStates which makes provision therefor, the Reinsurer hereby designates theparty named in its Interests and Liabilities Agreement, or if no party is namedtherein, the Superintendent, Commissioner or Director of Insurance or otherofficer specified for that purpose in the statute, or his successor orsuccessors in office, as its true and lawful attorney upon whom may be servedany lawful process in any action, suit or proceeding instituted by or on behalfof the Company or any beneficiary hereunder arising out of this Contract.

**Article XXV - Agency Agreement**

If more than one reinsured company is named as a party to thisContract, the first named company shall be deemed the agent of the otherreinsured companies for purposes of sending or receiving notices required bythe terms and conditions of this Contract, and for purposes of remitting orreceiving any monies due any party.

**Article XXVI - Governing Law (BRMA 71B)**

This Contract shall be governed by and construed in accordance with thelaws of the Commonwealth of Massachusetts.

16

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**Article XXVII -Severability (BRMA 72E)**

If any provision of this Contract shall be rendered illegal orunenforceable by the laws, regulations or public policy of any state, suchprovision shall be considered void in such state, but this shall not affect thevalidity or enforceability of any other provision of this Contract or theenforceability of such provision in any other jurisdiction.

**Article XXVIII -Intermediary (BRMA 23A)**

Benfield Inc. is hereby recognized as the Intermediary negotiating thisContract for all business hereunder. All communications (including but notlimited to notices, statements, premium, return premium, commissions, taxes,losses, loss adjustment expense, salvages and loss settlements) relatingthereto shall be transmitted to the Company or the Reinsurer through BenfieldInc. Payments by the Company to the Intermediary shall be deemed to constitutepayment to the Reinsurer. Payments by the Reinsurer to the Intermediary shallbe deemed to constitute payment to the Company only to the extent that suchpayments are actually received by the Company.

**In Witness Whereof,** the Company byits duly authorized representative has executed this Contract as of the dateundermentioned at:

Boston, Massachusetts, this 9th day of January in the year 2006.
|        | /s/ [Illegible]                    |   |
|--------|------------------------------------|--------|
|   | Safety Insurance Company           |
|   | Safety Indemnity Insurance Company |

 

17

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**Schedule AProperty Excess of Loss Reinsurance ContractEffective: January 1, 2006**

**issued to**

**Safety Insurance CompanyandSafety Indemnity Insurance Company both of Boston, Massachusetts**
| ** **                             | ** ** | **First   Excess** | ** ** | **Second   Excess** | ** ** | **Third   Excess** | ** ** |
|----------------------------------------|------------|-------------------------|------------|--------------------------|------------|-------------------------|------------|
| Company’s Retention               |       | $                       | 1,500,000  |                     | $          | 2,500,000               |       | $ | 5,000,000 |   |
|                                   |       |                    |       |                     |       |                    |       |
| Reinsurer’s Per Risk  Limit       |       | $                       | 1,000,000  |                     | $          | 2,500,000               |       | $ | 10,000,000 |   |
|                                   |       |                    |       |                     |       |                    |       |
| Reinsurer’s Per  Occurrence Limit |       | $                       | 2,000,000  |                     | $          | 5,000,000               |       | $ | 10,000,000 |   |
|                                   |       |                    |       |                     |       |                    |       |
| Reinsurer’s Term Limit            |       | $                       | 4,000,000  |                     | $          | 7,500,000               |       | $ | 20,000,000 |   |
|                                   |       |                    |       |                     |       |                    |       |
| Premium Rate                           |       | 0.194                   | %          | 0.2323                   | %          | 0.3872                  | %          |
|                                   |       |                    |       |                     |       |                    |       |
| Annual Minimum and  Deposit Premium    |       | $                       | 100,000    |                     | $          | 120,000                 |       | $ | 200,000 |   |
|                                   |       |                    |       |                     |       |                    |       |
| Quarterly Minimum and Deposit Premium  |       | $                       | 25,000     |                     | $          | 30,000                  |       | $ | 50,000 |   |

 

The figures listed above for each excess layer shall apply to eachSubscribing Reinsurer in the percentage share for that excess layer asexpressed in its Interests and Liabilities Agreement attached hereto.

----

**Nuclear IncidentExclusion Clause - Physical Damage - Reinsurance (U.S.A.)**

**This Reinsurance does not cover any loss of  liability accruing to the Reassured, directlyor indirectly and whether as Insurer or Reinsurer,  from any Pool of Insurers or Reinsurersformed for the purpose of covering Atomic or Nuclear Energy risks.**

2.*                         *Without in any way restricting the operationof paragraph (1) of this Clause, this Reinsurance does not cover any loss orliability accruing to the Reassured, directly or indirectly and whether asInsurer or Reinsurer, from any insurance against Physical Damage (includingbusiness interruption or consequential loss arising out of such PhysicalDamage) to:

**Nuclear reactor power plants including all auxiliaryproperty on the site, or**

II.                       Any other nuclear reactor installation,including laboratories handling radioactive materials in connection withreactor installations, and “critical facilities” as such, or

III.                   Installationsfor fabricating complete fuel elements or for processing substantial quantitiesof “special nuclear material,” and for reprocessing, salvaging, chemicallyseparating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV.                   Installationsother than those listed in paragraph (2) III above using substantial quantitiesof radioactive isotopes or other products of nuclear fission.

3.                          Withoutin any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any lossor liability by radioactive contamination accruing to the Reassured, directlyor indirectly, and whether as Insurer or Reinsurer, from any insurance onproperty which is on the same site as a nuclear reactor power plant or othernuclear installation and which normally would be insured therewith except thatthis paragraph (3) shall not operate

(a)                    whereReassured does not have knowledge of such nuclear reactor power plant ornuclear installation, or

(b)                   wheresaid insurance contains a provision excluding coverage for damage to propertycaused by or resulting from radioactive contamination, however caused. Howeveron and after 1st January 1960 this sub-paragraph (b) shall only apply providedthe said radioactive contamination exclusion provision has been approved by theGovernmental Authority having jurisdiction thereof.

4.                          Withoutin any way restricting the operations of paragraphs (1), (2) and (3) hereof,this Reinsurance does not cover any loss or liability by radioactivecontamination accruing to the Reassured, directly or indirectly, and whether asinsurer or Reinsurer, when such radioactive contamination is a named hazardspecifically insured against.

5.                          Itis understood and agreed that this Clause shall not extend to risks usingradioactive isotopes in any form where the nuclear exposure is not consideredby the Reassured to be the primary hazard.

6.                          Theterm “special nuclear material” shall have the meaning given it in the AtomicEnergy Act of 1954 or by any law amendatory thereof.

7.                          Reassuredto be sole judge of what constitutes:

(a)                    substantialquantities, and

(b)                   theextent of installation, plant or site

*Note.*-Without in any wayrestricting the operation of paragraph (1) hereof, it is understood and agreedthat

(a)                    allpolicies issued by the Reassured on or before 31st December 1957 shall be freefrom the application of the other provisions of this Clause until expiry dateor 31st December 1960 whichever first occurs whereupon all the provisions ofthis Clause shall apply.

(b)                   withrespect to any risk located in Canada policies issued by the Reassured on orbefore 31st December 1958 shall be free from the application of the otherprovisions of this Clause until expiry date or 31st December 1960 whicheverfirst occurs whereupon all the provisions of this Clause shall apply.

----

**Total Insured ValueExclusion Clause**

It is the mutual intention of the parties to exclude risks, other thanOffices, Hotels, Apartments, Hospitals, Educational Establishments and PublicUtilities (except Railroad Schedules), and Builders Risks on the above classes,where at the time of cession, the Total Insured Value over all interestsexceeds $250,000,000. However, the Company shall be protected hereunder,subject to the other terms and conditions of this Contract, if subsequent tocession being made, the Company becomes acquainted with the true facts of thecase and discovers that the mutual intention has been inadvertently breached;on condition that the Company shall at the first opportunity, and certainly bynext anniversary of the original policy, exclude the risk in question.

It is agreed that this mutual intention does not apply to ContingentBusiness Interruption or to interests traditionally underwritten as InlandMarine or to Stock and/or Contents written on a blanket basis except where theCompany is aware that the Total Insured Value of $250,000,000 is alreadyexceeded for buildings, machinery, equipment and direct use and occupancy atthe key location.

It is understood and agreed that this Clause shall not apply hereunderwhere the Company writes 100% of the risk.

----

**Terrorism ExclusionClause**

A.                      Notwithstandingany provision to the contrary within this Contract or any addendum thereto, itis agreed that this Contract excludes loss, damage, cost or expense directly orindirectly caused by, contributed to by, resulting from, arising out of or inconnection with any “act of terrorism,” as defined in the Terrorism RiskInsurance Act of 2002, as amended by the Terrorism Risk Insurance Extension Actof 2005 (together the “Terrorism Act”), on primary or excess property andcasualty insurance issued by the Company, regardless of any other cause orevent contributing concurrently or in any sequence to the loss.

B.                        Notwithstandingthe above and subject otherwise to the terms, conditions and limitations ofthis Contract, this Contract will pay actual loss or damage caused by any actof terrorism which does not meet the definition of “insured loss” set forth inthe Terrorism Act or meets the definition of “insured loss” as set forth in theTerrorism Act, but results in loss under a policy that is not included in “propertyand casualty insurance” as defined in the Terrorism Act, provided, in eithercase, (1) such loss or damage occurs in a line of insurance otherwise coveredby this Contract, and (2) in no event will this Contract provide coverage forloss, damage, cost or expense directly or indirectly caused by, contributed toby, resulting from, or arising out of or in connection with biological,chemical, radioactive or nuclear explosion, pollution, contamination and/orfire following thereon.

----

**Interests and LiabilitiesAgreement**

**of**

**Aspen Insurance UK LimitedLondon, England(*hereinafter referred to as the “SubscribingReinsurer”*)**

with respect to the

**PropertyExcess of LossReinsurance ContractEffective: January 1, 2006**

issued to and dulyexecuted by

Safety Insurance CompanyandSafety Indemnity Insurance Companyboth of Boston, Massachusetts

The *Subscribing Reinsurer*herebyaccepts the following percentage shares in the interests and liabilities of the“Reinsurer” as set forth in the attached Contract captioned above:
| 2.5% |   | of the First Property Excess of Loss Reinsurance  |
|------|--------|---------------------------------------------------|
| 2.5% |   | of the Second Property Excess of Loss Reinsurance |
| 2.5% |   | of the Third Property Excess of Loss Reinsurance  |

 

This Agreement shall become effective at 12:01 a.m., Eastern StandardTime, January 1, 2006, and shall continue in force until 12:01 a.m., EasternStandard Time, January 1, 2007, unless earlier terminated in accordance withthe provisions of the attached Contract.

The *Subscribing Reinsurer’s*sharein the attached Contract shall be separate and apart from the shares of theother reinsurers, and shall not be joint with the shares of the otherreinsurers, it being understood that the *SubscribingReinsurer*shall in no event participate in the interests andliabilities of the other reinsurers.

**In Witness Whereof**, the *Subscribing Reinsurer*by**its duly authorized representative hasexecuted this Agreement as of the date undermentioned at:

Hamilton, Bermuda, this 13th day of January in the year 2006.
|        | /s/ [Illegible]            |   |
|--------|----------------------------|--------|
|   | Aspen Insurance UK Limited |

 

----

**Interests and LiabilitiesAgreement**

of

HannoverRuckversicherungs-AktiengesellschaftHannover, Germany(*hereinafter referred to as the “SubscribingReinsurer”*)

with respect to the

**PropertyExcess of LossReinsurance ContractEffective: January 1, 2006**

issued to and dulyexecuted by

Safety Insurance CompanyandSafety Indemnity Insurance Companyboth of Boston, Massachusetts

The *Subscribing Reinsurer*hereby accepts the following percentage shares in the interests and liabilitiesof the “Reinsurer” as set forth in the attached Contract captioned above:
| **10.0%** | ** ** | **of the First Property Excess of Loss Reinsurance**  |
|-----------|------------|-------------------------------------------------------|
| **10.0%** | ** ** | **of the Second Property Excess of Loss Reinsurance** |
| **10.0%** | ** ** | **of the Third Property Excess of Loss Reinsurance**  |

 

This Agreement shall become effective at 12:01 a.m., Eastern StandardTime, January 1, 2006, and shall continue in force until 12:01 a.m., EasternStandard Time, January 1, 2007, unless earlier terminated in accordance withthe provisions of the attached Contract.

The *Subscribing Reinsurer’s*sharein the attached Contract shall be separate and apart from the shares of theother reinsurers, and shall not be joint with the shares of the other reinsurers,it being understood that the *SubscribingReinsurer*shall in no event participate in the interests andliabilities of the other reinsurers.

In any action, suit or proceeding to enforce the *Subscribing Reinsurer’s*obligations underthe attached Contract, service of process may be made upon Mendes & Mount,750 Seventh Avenue, New York, New York 10019.

**In Witness Whereof**, the *Subscribing Reinsurer*by its dulyauthorized representative has executed this Agreement as of the dateundermentioned at:

Hannover, Germany, this 20th day of January in the year 2006.
|        | /s/ [Illegible]                                 |   |
|--------|-------------------------------------------------|--------|
|   | Hannover Ruckversicherungs - Aktiengesellschaft |

 

----

**Interests and LiabilitiesAgreement**

**of**

Certain UnderwritingMembers of Lloyd’sshown in the Signing Schedules attached hereto(*hereinafter referred to as the “SubscribingReinsurer”*)

with respect to the

**PropertyExcess of LossReinsurance ContractEffective: January 1, 2006**

issued to and dulyexecuted by

Safety Insurance CompanyandSafety Indemnity Insurance Companyboth of Boston, Massachusetts

The *Subscribing Reinsurer*herebyaccepts the following percentage shares in the interests and liabilities of the“Reinsurer” as set forth in the attached Contract captioned above:
| 87.5% |   | of the First Property Excess of Loss Reinsurance  |
|-------|--------|---------------------------------------------------|
| 87.5% |   | of the Second Property Excess of Loss Reinsurance |
| 87.5% |   | of the Third Property Excess of Loss Reinsurance  |

 

This Agreement shall become effective at 12:01 a.m., Eastern StandardTime, January 1, 2006, and shall continue in force until 12:01 a.m., EasternStandard Time, January 1, 2007, unless earlier terminated in accordance withthe provisions of the attached Contract.

The *Subscribing Reinsurer’s*sharein the attached Contract shall be separate and apart from the shares of theother reinsurers, and shall not be joint with the shares of the otherreinsurers, it being understood that the *SubscribingReinsurer*shall in no event participate in the Interests andliabilities of the other reinsurers.

In any action, suit or proceeding to enforce the *Subscribing Reinsurer’s*obligations underthe attached Contract, service of process may be made upon Mendes & Mount,750 Seventh Avenue, New York, New York 10019.

Signed for and on behalfof the *Subscribing Reinsurer*inthe Signing Schedules attached hereto.

----

**Signing Schedule**

**attaching to and forming part of the**

**Interests and LiabilitiesAgreement**of

**Certain Underwriting Members ofLloyd’s**

with respect to the
| **BUREAU REFERENCE** | ** ** | **61215 09/01/06** | ** ** | **BROKER NUMBER   1108** |
|----------------------|------------|--------------------|------------|-----------------------------------------|

 
| PROPORTION  %  | ** ** | **SYNDICATE**          | ** ** | **UNDERWRITER’S  REFERENCE** |
|----------------|------------|------------------------|------------|-----------------------------------|
| 23.647         |       |                   | 2001       |                              |   | RAB1508806ME |
| 10.642         |       |                   | 2791       |                              |   | R1106NG00552 |
| 14.190         |       |                   | 1414       |                              |   | XR06AB018E5X |
| 10.642         |       |                   | 958        |                              |   | AVRAXNEN5401 |
|  7.094    |       |                   | 2020       |                              |   | P357807L0X |
|  7.095    |       |                   | 2010       |                              |   | N06A7650A001 |
| 14.190         |       |                   | 2003       |                              |   | AF3000101515 |
|           |       |                   |       |                              |   |   |
| **TOTAL LINE** | ** ** | **No. OF  SYNDICATES** | ** ** | ** **                        |
| **87.500**     | ** ** | **7**                  | ** ** | ** **                        |

 

THE LIST OF UNDERWRITINGMEMBERSOF LLOYDS IS IN RESPECT OF 2006YEAR OF ACCOUNT

BUREAU USE ONLYUSE3 55 13197

1

----

**Signing Schedule**

**attaching to and forming part of the**

**Interests and LiabilitiesAgreement**of

**Certain Underwriting Members of Lloyd’s**
| **BUREAU REFERENCE** | ** ** | **61216 09/01/06** | ** ** | **BROKER NUMBER   1108** |
|----------------------|------------|--------------------|------------|-----------------------------------------|

 
| PROPORTION  %  | ** ** | **SYNDICATE**          | ** ** | **UNDERWRITER’S  REFERENCE** |
|----------------|------------|------------------------|------------|-----------------------------------|
| 17.500         |       |                   | 2001       |                              |   | RAB1508906EE |
| 13.125         |       |                   | 2791       |                              |   | R1106PG00553 |
| 13.125         |       |                   | 1414       |                              |   | XR06AB019P5X |
| 8.750          |       |                   | 958        |                              |   | AVRAXNEN5402 |
| 8.750          |       |                   | 2010       |                              |   | N06A7660A001 |
| 8.750          |       |                   | 2020       |                              |   | P556726B0X |
| 17.500         |       |                   | 2003       |                              |   | AF0000101516 |
|           |       |                   |       |                              |   |   |
| **TOTAL LINE** | ** ** | **No. OF  SYNDICATES** | ** ** | ** **                        |
| **87.500**     | ** ** | **7**                  | ** ** | ** **                        |

 

**THE LIST OF UNDERWRITING MEMBERSOF LLOYDS IS IN RESPECT OF 2006YEAR OF ACCOUNT**

BUREAU USE ONLYUSE3  55  13197

1

----

**Signing Schedule**

**attaching to and forming part of the**

**Interests and LiabilitiesAgreement**

**of**

**Certain Underwriting Members of Lloyd’s**

**with respect to the**
| **BUREAU REFERENCE** | ** ** | **61226 09/01/06** | ** ** | **BROKER NUMBER   1108** |
|----------------------|------------|--------------------|------------|-----------------------------------------|

 
| PROPORTION  %  | ** ** | **SYNDICATE**          | ** ** | **UNDERWRITER’S  REFERENCE** |
|----------------|------------|------------------------|------------|-----------------------------------|
| 17.949         |       |                   | 2001       |                              |   | RAB1509006NE |
| 13.462         |       |                   | 2791       |                              |   | R1106RG00554 |
| 11.218         |       |                   | 1414       |                              |   | XR06AB020N5X |
| 8.974          |       |                   | 958        |                              |   | AVRAXNEN5403 |
| 8.974          |       |                   | 2020       |                              |   | P556727L0X |
| 8.974          |       |                   | 2010       |                              |   | N06A7670A001 |
| 17.949         |       |                   | 2003       |                              |   | AF6000101517 |
|           |       |                   |       |                              |   |   |
| **TOTAL LINE** | ** ** | **No. OF  SYNDICATES** | ** ** | ** **                        |
| **87.500**     | ** ** | **7**                  | ** ** | ** **                        |

 

**THE LIST OF UNDERWRITING MEMBERSOF LLOYDS IS IN RESPECT OF 2006YEAR OF ACCOUNT**

BUREAU USE ONLYUSE3  55  13197

1

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**Property Excess of LossReinsurance ContractEffective: January 1, 2006**

**issued to**

**Safety Insurance CompanyandSafety Indemnity Insurance Companyboth of Boston, Massachusetts**

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**Table of Contents**
| Article | ** ** | ** **                      | ** ** | **Page** |
|---------|------------|---------------------------------|------------|----------|
|    |       | Classes of Business Reinsured   |       | 1        |
| II      |       | Commencement and Termination    |       | 1        |
| III     |       | Territory (BRMA 51A)            |       | 2        |
| IV      |       | Exclusions                      |       | 2        |
| V       |       | Retention and Limit             |       | 3        |
| VI      |       | Reinstatement                   |       | 4        |
| VII     |       | Definitions                     |       | 5        |
| VIII    |       | Loss Occurrence                 |       | 6        |
| IX      |       | Loss Notices and Settlements    |       | 9        |
| X       |       | Salvage and Subrogation         |       | 9        |
| XI      |       | Reinsurance Premium             |       | 9        |
| XII     |       | Late Payments                   |       | 10       |
| XIII    |       | Offset (BRMA 36C)               |       | 11       |
| XIV     |       | Access to Records (BRMA 1D)     |       | 11       |
| XV      |       | Liability of the Reinsurer      |       | 12       |
| XVI     |       | Net Retained Lines (BRMA 32B)   |       | 12       |
| XVII    |       | Errors and Omissions (BRMA 14F) |       | 12       |
| XVIII   |       | Currency (BRMA 12A)             |       | 12       |
| XIX     |       | Taxes (BRMA 50B)                |       | 13       |
| XX      |       | Federal Excise Tax              |       | 13       |
| XXI     |       | Unauthorized Reinsurers         |       | 13       |
| XXII    |       | Insolvency                      |       | 14       |
| XXIII   |       | Arbitration                     |       | 15       |
| XXIV    |       | Service of Suit (BRMA 49C)      |       | 16       |
| XXV     |       | Agency Agreement                |       | 16       |
| XXVI    |       | Governing Law (BRMA 71B)        |       | 16       |
| XXVII   |       | Severability (BRMA 72E)         |       | 17       |
| XXVIII  |       | Intermediary (BRMA 23A)         |       | 17       |
|    |       | Schedule A                      |       |     |

 

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**PropertyExcess of LossReinsurance Contract****Effective: January 1, 2006**

Issued to

Safety Insurance CompanyandSafety Indemnity Insurance Companyboth of Boston, Massachusetts(*hereinafter referred to collectively as the*“Company”)

by

The Subscribing Reinsurer(s)Executing theInterests and Liabilities Agreement(s) Attached Hereto(*hereinafter referred to as the* “Reinsurer”)

**Article I - Classes ofBusiness Reinsured**

By this Contract the Reinsurer agrees to reinsure the excess liabilitywhich may accrue to the Company under its policies, contracts and binders ofinsurance or reinsurance (hereinafter called “policies”) in force on theeffective date hereof or issued or renewed on or after that date, andclassified by the Company as Fire, Allied Lines. Homeowners Multiple Peril(Section I only). Commercial Multiple Peril (Section I only) and Inland Marinebusiness, subject to the terms, conditions and limitations set forth herein andin Schedule A attached to and forming part of this Contract.

**Article II - Commencementand Termination**

A.                      ThisContract shall become effective at 12:01 a.m., Eastern Standard Time, January1, 2006 with respect to losses occurring at or after that time and date, andshall remain in force until 12:01 a.m., Eastern Standard Time, January 1, 2007.

B.                        Notwithstandingthe provisions of paragraph A above, the Company may terminate a SubscribingReinsurer’s percentage share in this Contract at any time by giving writtennotice to the Subscribing Reinsurer in the event any of the following circumstancesoccur:

The Subscribing Reinsurer’s policyholders’ surplus atthe inception of this Contract has been reduced by more than 20.0% of theamount of surplus 12 months prior to that date; or

2.                         TheSubscribing Reinsurer’s policyholders’ surplus at any time during the term ofthis Contract has been reduced by more than 20.0% of the amount of surplus atthe date

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of the Subscribing Reinsurer’s most recent financialstatement filed with regulatory authorities and available to the public as ofthe inception of this Contract; or

3.                         TheSubscribing Reinsurer’s A.M. Best’s rating has been assigned or downgradedbelow A- and/or Standard & Poor’s rating has been assigned or downgradedbelow BBB+; or

4.                         TheSubscribing Reinsurer has become merged with, acquired by or controlled by anyother company, corporation or individual(s) not controlling the SubscribingReinsurer’s operations previously; or

5.                         AState Insurance Department or other legal authority has ordered the SubscribingReinsurer to cease writing business; or

6.                         TheSubscribing Reinsurer has become insolvent or has been placed into liquidationor receivership (whether voluntary or involuntary) or proceedings have beeninstituted against the Subscribing Reinsurer for the appointment of a receiver,liquidator, rehabilitator, conservator or trustee in bankruptcy, or other agentknown by whatever name, to take possession of its assets or control of itsoperations; or

7.                         TheSubscribing Reinsurer has reinsured its entire liability under this Contractwithout the Company’s prior written consent; or

8.                         TheSubscribing Reinsurer has ceased assuming new and renewal property treatyreinsurance business.

C.                        TheReinsurer shall have no liability hereunder with respect to losses occurringafter the effective date of termination.

**Article III - Territory(BRMA 51A)**

The territorial limits of this Contract shall be identical with thoseof the Company’s policies.

**Article IV - Exclusions**

This Contract does not apply to and specifically excludes thefollowing:

1.                         Lossor damage occasioned by war, invasion, hostilities, acts of foreign enemies,civil war, rebellion, insurrection, military or usurped power, martial law orconfiscation by order of any government or public authority, but not excludingloss or damage which would be covered under a standard form of policycontaining a standard war exclusion clause.

2.                         Nuclearrisks as defined in the “Nuclear Incident Exclusion Clause - Physical Damage -Reinsurance” attached to and forming part of this Contract.

3.                         Liabilityas a member, subscriber or reinsurer of any Pool, Syndicate or Association; andany combination of insurers or reinsurers formed for the purpose of covering

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specific perils, specific classes of business or for the purpose ofinsuring risks located in specific geographical areas; but this exclusion shallnot apply to FAIR Plans or to SIR Pool, Franklin Pool, Coastal Pools, BeachPlans or similar plans, however styled. It is understood and agreed, however,that this reinsurance does not include any increase in liability to the Companyresulting from (a) the inability of any other participant in a FAIR Plan, SIRPool, Franklin Pool, Coastal Pool, Beach Plan or similar plan to meet itsliability, or (b) any claim against such a FAIR Plan, SIR Pool, Franklin Pool,Coastal Pool, Beach Plan or similar plan, or any participant therein, includingthe Company, whether by way of subrogation or otherwise, brought by or onbehalf of any insolvency fund.

4.                          Financialguarantee and insolvency.

5.                          Thirdparty liability.

6.                          Allliability of the Company arising by contract, operation of law, or otherwise,from its participation or membership, whether voluntary or involuntary, in anyinsolvency fund. “Insolvency fund” includes any guaranty fund, insolvency fund,plan, pool, association, fund or other arrangement, however denominated,established or governed, which provides for any assessment of or payment orassumption by the Company of part or all of any claim, debt, charge, fee orother obligation of an insurer, or its successors or assigns, which has beendeclared by any competent authority to be insolvent, or which is otherwisedeemed unable to meet any claim, debt, charge, fee or other obligation in wholeor in part.

7.                          Allclasses of business not specifically listed in the Classes of BusinessReinsured Article.

8.                          Reinsuranceassumed, except pro rata local agency reinsurance on specific risks

9.                          Ex-gratiapayments.

10.                    Risksexcluded under the provisions of the “Total Insured Value Clause” attached toand forming part of this Contract.

11.                    Lossor liability excluded under the “Terrorism Exclusion Clause” attached to andforming part of this Contract.

12.                    Lossand/or damage and/or costs and/or expenses arising from Seepage and/orPollution and/or Contamination, other than contamination from Smoke Damage.Nevertheless, this exclusion does not preclude any payment of the cost of theremoval of debris of property damaged by a loss otherwise covered hereunder,but subject always to a limit of 25.0% of the Company’s property loss under theoriginal policy.

**Article V - Retention and Limit**

A.                      Asrespects each excess layer of reinsurance coverage provided by this Contract,the Company shall retain and be liable for the first amount of ultimate netloss, shown as “Company’s Retention” for that excess layer in Schedule Aattached hereto, as respects

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each risk, each loss. The Reinsurer shall then be liable, as respectseach excess layer, for the amount by which such ultimate net loss exceeds theCompany’s applicable retention, but the liability of the Reinsurer under eachexcess layer shall not exceed the amount, as respects each risk, each loss,shown as “Reinsurer’s Per Risk Limit” for that excess layer in Schedule Aattached hereto, nor shall it exceed the amount, shown as “Reinsurer’s PerOccurrence Limit” for that excess layer in Schedule A attached hereto, asrespects any one loss occurrence for the contract year under consideration.

B.                        TheCompany shall be the sole judge of what constitutes “one risk,” except that inno event shall a building and its contents be considered more than one risk.

C.                        TheCompany shall be permitted to carry facultative reinsurance, recoveries underwhich shall inure to the benefit of this Contract.

**Article VI -Reinstatement**

A.                      In the event all or any portion of the reinsurance under any excess layer ofreinsurance coverage provided by this Contract is exhausted by loss, the amountso exhausted shall be reinstated immediately from the time the loss occurshereon.

1.                         Asrespects the First Excess Layer:

a.                          Forthe first and second amount, shown as “Reinsurer’s Per Risk limit” for thatexcess layer in Schedule A attached hereto, of ultimate net loss so reinstated,the Company shall pay no additional premium.

b.                         Forthe third amount, shown as “Reinsurer’s Per Risk Limit” for that excess layerin Schedule A attached hereto, of ultimate net loss so reinstated, the Companyagrees to pay additional premium equal to the product of the following:

The percentage of the per risk limit for the excesslayer reinstated (based on the loss paid by the Reinsurer under that excesslayer); times

ii.                         Theearned reinsurance premium for the excess layer reinstated for the term of thisContract (exclusive of reinstatement premium).

2.                         Asrespects the Second Excess Layer:

a.                          Forthe first amount, shown as “Reinsurer’s Per Risk Limit” for that excess layerin Schedule A attached hereto, of ultimate net loss so reinstated, the Companyshall pay no additional premium.

b.                         Forthe second amount, shown as “Reinsurer’s Per Risk Limit” for that excess layerin Schedule A attached hereto, of ultimate net loss so reinstated, the Companyagrees to pay additional premium equal to the product of the following:

The percentage of the per risk limit for the excesslayer reinstated (based on the loss paid by the Reinsurer under that excesslayer); times

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ii.                         Theearned reinsurance premium for the excess layer reinstated for the term of thisContract (exclusive of reinstatement premium).

3.                         Asrespects the Third Excess Layer, for each amount so reinstated, the Companyagrees to pay additional premium equal to the product of the following:

a.                          Thepercentage of the per risk limit for the excess layer reinstated (based on theloss paid by the Reinsurer under that excess layer); times

b.                         Theearned reinsurance premium for the excess layer reinstated for the term of thisContract (exclusive of reinstatement premium).

B.                        Wheneverthe Company requests payment by the Reinsurer of any loss under any excesslayer hereunder, the Company shall submit a statement to the Reinsurer ofreinstatement premium due the Reinsurer for that excess layer. If the earnedreinsurance premium for any excess layer for the term of this Contract has notbeen finally determined as of the date of any such statement, the calculationof reinstatement premium due for that excess layer shall be based on the annualdeposit premium for that excess layer and shall be readjusted when the earnedreinsurance premium for that excess layer for the term of this Contract hasbeen finally determined. Any reinstatement premium shown to be due theReinsurer for any excess layer as reflected by any such statement (less priorpayments, if any, for that excess layer) shall be payable by the Companyconcurrently with payment by the Reinsurer of the requested loss for thatexcess layer. Any return reinstatement premium shown to be due the Companyshall be remitted by the Reinsurer as promptly as possible after receipt andverification of the Company’s statement.

C.                        Notwithstandinganything stated herein, the liability of the Reinsurer under any excess layerof reinsurance coverage provided by this Contract shall not exceed any of thefollowing:

The amount, shown as “Reinsurer’s Per Risk Limit” forthat excess layer in Schedule A attached hereto, as respects each risk, each loss;or

2.                         Theamount, shown as “Reinsurer’s Per Occurrence Limit” for that excess layer inSchedule A attached hereto, as respects loss or losses arising out of any oneloss occurrence; or

3.                         Theamount, shown as “Reinsurer’s Term Limit” for that excess layer in Schedule Aattached hereto, in all during the term of this Contract.

**Article VII - Definitions**

A.                      “Ultimatenet loss” as used herein is defined as the sum or sums (including loss inexcess of policy limits, extra contractual obligations, and all loss adjustmentexpense, as hereinafter defined) paid or payable by the Company in settlementof claims and in satisfaction of judgments rendered on account of such claims,after deduction of all salvage, all recoveries and all claims on inuringinsurance or reinsurance, whether collectible or not. Nothing herein shall beconstrued to mean that losses under this Contract are not recoverable until theCompany’s ultimate net loss has been ascertained.

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B.                        “Lossin excess of policy limits” and “extra contractual obligations” as used hereinshall be defined as follows:

“Loss in excess of policy limits” shall mean 90.0% ofany amount paid or payable by the Company in excess of its policy limits, butotherwise within the terms of its policy, such loss in excess of the Company’spolicy limits having been incurred because of, but not limited to, failure bythe Company to settle within the policy limits or by reason of the Company’salleged or actual negligence, fraud or bad faith in rejecting an offer ofsettlement or in the preparation of the defense or in the trial of an actionagainst its insured or reinsured or in the preparation or prosecution of anappeal consequent upon such an action.

2.                         “Extracontractual obligations” shall mean 90.0% of any punitive, exemplary,compensatory or consequential damages paid or payable by the Company, notcovered by any other provision of this Contract and which arise from thehandling of any claim on business subject to this Contract, such liabilitiesarising because of, but not limited to, failure by the Company to settle withinthe policy limits or by reason of the Company’s alleged or actual negligence,fraud or bad faith in rejecting an offer of settlement or in the preparation ofthe defense or in the trial of any action against its insured or reinsured orin the preparation or prosecution of an appeal consequent upon such an action.An extra contractual obligation shall be deemed, in all circumstances, to haveoccurred on the same date as the loss covered or alleged to be covered underthe policy.

Notwithstanding anything stated herein, this Contract shall not applyto any loss in excess of policy limits or any extra contractual obligationincurred by the Company as a result of any fraudulent and/or criminal act byany officer or director of the Company acting individually or collectively orin collusion with any individual or corporation or any other organization orparty involved in the presentation, defense or settlement of any claim coveredhereunder.

Savings Clause (Applicable only if the Subscribing Reinsurer isdomiciled in the State of New York): In no event shall coverage be provided tothe extent that such coverage is not permitted under New York law.

C.                        “Lossadjustment expense” as used herein shall mean expenses assignable to theinvestigation, appraisal, adjustment, settlement, litigation, defense and/orappeal of specific claims, regardless of how such expenses are classified forstatutory reporting purposes. Loss adjustment expense shall include, but not belimited to, interest on judgments, expenses of outside adjusters, anddeclaratory judgment expenses or other legal expenses and costs incurred inconnection with coverage questions and legal actions connected thereto, butshall not include office expenses or salaries of the Company’s regularemployees not classified as loss adjusters.

**Article VIII - Loss Occurrence**

A.                      Theterm “loss occurrence” shall mean the sum of all individual losses directlyoccasioned by any one disaster, accident or loss or series of disasters,accidents or losses arising out of one event which occurs within the area ofone state of the Untied States or province of

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Canada and states or provinces contiguous thereto and to one another.However, the duration and extent of any one “loss occurrence” shall be limitedto all individual losses sustained by the Company occurring during any periodof 168 consecutive hours arising out of and directly occasioned by the sameevent, except that the term “loss occurrence” shall be further defined asfollows:

As regards windstorm, hall, tornado, hurricane,cyclone, including ensuing collapse and water damage, all individual lossessustained by the Company occurring during any period of 72 consecutive hoursarising out of and directly occasioned by the same event. However, the eventneed not be limited to one state or province or states or provinces contiguousthereto.

2.                         Asregards riot, riot attending a strike, civil commotion, vandalism and maliciousmischief, all individual losses sustained by the Company occurring during anyperiod of 72 consecutive hours within the area of one municipality or countyand the municipalities or counties contiguous thereto arising out of anddirectly occasioned by the same event. The maximum duration of 72 consecutivehours may be extended in respect of individual losses which occur beyond such72 consecutive hours during the continued occupation of an assured’s premisesby strikers, provided such occupation commenced during the aforesaid period.

3.                         Asregards earthquake (the epicentre of which need not necessarily be within theterritorial confines referred to in paragraph A of this Article) and firefollowing directly occasioned by the earthquake, only those individual firelosses which commence during the period of 168 consecutive hours may beincluded in the Company’s “loss occurrence.”

4.                         Asregards “freeze,” only individual losses directly occasioned by collapse,breakage of glass and water damage (including, but not limited to, those causedby bursting frozen pipes and tanks) may be included in the Company’s “lossoccurrence.”

5.                         Asregards firestorms, brush fires and any other fires or series of fires,irrespective of origin (except as provided in subparagraphs 2 and 3 above),which spread through trees, grassland or other vegetation, all individuallosses sustained by the Company which occur during any period of 168consecutive hours within 150-mile radius of any one fixed point selected by theCompany may be included in the Company’s “loss occurrence.” However, anindividual loss subject to this subparagraph cannot be included in more thanone “loss occurrence.”

B.                        Exceptfor those “loss occurrences,” referred to in subparagraphs 1 and 2 of paragraphA above, the Company may choose the date and time when any such period of consecutivehours commences, provided that it is not earlier than the date and time of theoccurrence of the first recorded individual loss sustained by the Companyarising out of that disaster, accident or loss, and provided that only one suchperiod of 168 consecutive hours shall apply with respect to one event.

C.                        Asrespects those “loss occurrences” referred to in subparagraphs 1 and 2 ofparagraph A above, if the disaster, accident or loss occasioned by the event isof greater duration than 72 consecutive hours, then the Company may divide thatdisaster, accident or loss into two or more “loss occurrences,” provided no twoperiods overlap and no individual loss is

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included in more than one such period and provided that no periodcommences earlier than the date and time of the occurrence of the firstrecorded individual loss sustained by the Company arising out of that disaster,accident or loss.

D.                       Noindividual losses occasioned by an event that would be covered by 72 hoursclauses may be included in any “loss occurrence” claimed under the 168 hoursprovision.

E.                         Anydate change, including leap-year calculations, shall not in and of itself beregarded as an event for purposes of this Contract.

This includes any loss, damage, cost, claim orexpense, whether preventative remedial or otherwise, directly or indirectlyarising out of or relating to:

a.                          Thecalculation, comparison, differentiation, sequencing or processing of datainvolving a date change, including leap-year calculations, by any computersystem, hardware, program or software and/or any microchip, integrated circuitor similar device in computer equipment or non-computer equipment, whether theproperty of the insured or not; or

b.                         Anychange, alteration or modification involving a date change, including leap-yearcalculations, to any such computer system, hardware, program or software or anymicrochip, integrated circuit or similar device in computer equipment ornon-computer equipment, whether the property of the insured or not.

This subparagraph shall apply regardless of any othercause or event that contributes concurrently or in any sequence to the loss,damage, cost, claim or expense.

However, this subparagraph shall not apply as respectsphysical damage occurring at the insured’s premises arising out of the perilscovered under this Contract.

2.                         Notwithstandingsubparagraph 1 above, this Contract shall not cover any costs and expenses,whether preventative, remedial or otherwise, arising out of or relating tochange, alteration or modification of any computer system, hardware, program orsoftware or any microchip, integrated circuit or similar device in computer ornon-computer equipment, whether the property of the insured or not.

F.                         Lossesarising, directly or indirectly, out of:

1                            Lossof, alteration of, or damage to;

or

2                            Areduction in the functionality, availability or operation of

A computer system, hardware, program, software, data,information repository, microchip, integrated circuit or similar device incomputer equipment or non-computer equipment, whether the property of thepolicyholder of the Company or not, do not in and of themselves constitute anevent unless arising out of one or more of the following perils:

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Fire, lightning, explosion, aircraft or vehicleimpact, falling objects, windstorm, hail, tornado, cyclone, hurricane,earthquake, volcano, tsunami, flood, freeze or weight of snow.

**Article IX - Loss Notices and Settlements**

A.                      Whenevera loss sustained by the Company appears likely to result in a claim hereunder,the Company shall notify the Reinsurer, and the Reinsurer shall have the rightto participate in the adjustment of the loss at its own expense.

B.                        Allloss settlements made by the Company, provided they are within the terms ofthis Contract, shall be binding upon the Reinsurer, and the Reinsurer agrees topay all amounts for which it may be liable upon receipt of reasonable evidenceof the amount paid (or scheduled to be paid) by the Company.

**Article X - Salvage and Subrogation**

The Reinsurer shall be credited with salvage (i.e., reimbursementobtained or recovery made by the Company, less the actual cost, excludingsalaries of officials and employees of the Company and sums paid to attorneysas retainer, of obtaining such reimbursement or making such recovery) on accountof claims and settlements involving reinsurance hereunder. Salvage thereonshall always be used to reimburse the excess carriers in the reverse order oftheir priority according to their participation before being used in any way toreimburse the Company for its primary loss. The Company hereby agrees toenforce its rights to salvage or subrogation relating to any loss, a part ofwhich loss was sustained by the Reinsurer, and to prosecute all claims arisingout of such rights.

**Article XI - Reinsurance Premium**

A.                      Aspremium for each excess layer of reinsurance coverage provided by thisContract, the Company shall pay the Reinsurer the greater of the following:

1                            Theamount, shown as “Annual Minimum Premium” for that excess layer in Schedule Aattached hereto (or a pro rata portion thereof if a Subscribing Reinsurer’sshare under that excess layer is terminated in accordance with the provisionsof this Contract); or

2                            Thepercentage, shown as “Premium Rate” for that excess layer in Schedule Aattached hereto, of the Company’s net earned premium for the term of thisContract.

B.                        TheCompany shall pay the Reinsurer an annual deposit premium for each excess layerof the amount, shown as “Annual Deposit Premium” for that excess layer inSchedule A attached hereto, in four equal installments of the amount, shown as “QuarterlyDeposit Premium” for that excess layer in Schedule A attached hereto, onJanuary 1, April 1, July 1 and October 1 of 2006. In the event a SubscribingReinsurer’s share under any excess

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layer hereof is terminated, no quarterly deposit premium installmentfor such layer(s) shall be due to such Subscribing Reinsurer after theeffective date of termination.

C.                        Within60 days after the termination or expiration of this Contract, the Company shallprovide a report to the Reinsurer setting forth the premium due hereunder foreach excess layer, computed in accordance with paragraph A, and any additionalpremium due the Reinsurer or return premium due the Company for each suchexcess layer shall be remitted promptly.

D.                       “Netearned premium” as used herein is defined as gross earned premium of theCompany for the classes of business reinsured hereunder, less the earnedportion of premiums ceded by the Company for reinsurance which inures to thebenefit of this Contract. For purposes of calculating net earned premium, 90.0%of Homeowners Multiple Peril and 80.0% of Commercial Multiple Peril total basicpolicy premium on indivisible premium policies shall be considered subjectpremium.

**Article XII - Late Payments**

A.                      Theprovisions of this Article shall not be implemented unless specificallyinvoked, in writing, by one of the parties to this Contract.

B.                        Inthe event any premium, loss or other payment due either party is not receivedby the Intermediary named in the Intermediary Article (BRMA 23A) (hereinafterreferred to as the “Intermediary”) by the payment due date, the party to whompayment is due may, by notifying the Intermediary in writing, require thedebtor party to pay, and the debtor party agrees to pay, an interest penalty onthe amount past due calculated for each such payment on the last business dayof each month as follows:

The number of full days which have expired since thedue date or the last monthly calculation, whichever the lesser; times

2.                         1/365thsof the six-month United States Treasury Bill rate as quoted in *The Wall Street Journal*on the firstbusiness day of the month for which the calculation is made; times

3.                         Theamount past due, including accrued interest

It is agreed that interest shall accumulate until payment of theoriginal amount due plus interest penalties have been received by theIntermediary.

C.        The establishment of thedue date shall, for purposes of this Article, be determined as follows:

1.                         Asrespects the payment of routine deposits and premiums due the Reinsurer, thedue date shall be as provided for in the applicable section of this Contract.In the event a due date is not specifically stated for a given payment, itshall be deemed due 30 business days after the date of transmittal by theIntermediary of the initial billing for each such payment.

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2.                         Anyclaim or loss payment due the Company hereunder shall be deemed due 30 businessdays after the proof of loss or demand for payment is transmitted to theReinsurer. If such loss or claim payment is not received within the 30 businessdays, interest will accrue on the payment or amount overdue in accordance withparagraph B above, from the date the proof of loss or demand for payment wastransmitted to the Reinsurer.

3.                         Asrespects any payment, adjustment or return due either party not otherwiseprovided for in subparagraphs 1 and 2 of this paragraph, the due date shall beas provided for in the applicable section of this Contract. In the event a duedate is not specifically stated for a given payment, it shall be deemed due 30business days following transmittal of written notification that the provisionsof this Article have been invoked.

For purposes of interest calculations only, amounts due hereunder shallbe deemed paid upon receipt by the Intermediary.

D.                       Nothingherein shall be construed as limiting or prohibiting a Subscribing Reinsurerfrom contesting the validity of any claim, or from participating in the defenseof any claim or suit, or prohibiting either party from contesting the validityof any payment or from initiating any arbitration or other proceeding inaccordance with the provisions of this Contract. If the debtor party prevailsin an arbitration or other proceeding, then any interest penalties due hereunderon the amount in dispute shall be null and void. If the debtor party loses insuch proceeding, then the interest penalty on the amount determined to be duehereunder shall be calculated in accordance with the provisions set forth aboveunless otherwise determined by such proceedings. If a debtor party advancespayment of any amount it is contesting, and proves to be correct in itscontestation, either in whole or in part, the other party shall reimburse thedebtor party for any such excess payment made plus interest on the excessamount calculated in accordance with this Article.

E.                         Interestpenalties arising out of the application of this Article that are $100 or lessfrom any party shall be waived unless there is a pattern of late paymentsconsisting of three or more items over the course of any 12-month period.

**Article XIII - Offset (BRMA 36C)**

The Company and the Reinsurer shall have the right to offset anybalance or amounts due from one party to the other under the terms of thisContract. The party asserting the right of offset may exercise such right anytime whether the balances due are on account of premiums or losses orotherwise.

**Article XIV - Access to Records (BRMA 1D)**

The Reinsurer or its designated representatives shall have access atany reasonable time to all records of the Company which pertain in any way tothis reinsurance.

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**Article XV - Liability of the Reinsurer**

A.                      Theliability of the Reinsurer shall follow that of the Company in every case andbe subject in all respects to all the general and specific stipulations,clauses, waivers and modifications of the Company’s policies and anyendorsements thereon. However, in no event shall this be construed in any wayto provide coverage outside the terms and conditions set forth in this Contract.

B.                        Nothingherein shall in any manner create any obligations or establish any rightsagainst the Reinsurer in favor of any third party or any persons not parties tothis Contract.

**Article XVI - Net Retained Lines (BRMA 32B)**

A.                      ThisContract applies only to that portion of any policy which the Company retainsnet for its own account, and in calculating the amount of any loss hereunderand also in computing the amount or amounts in excess of which this Contractattaches, only loss or losses in respect of that portion of any policy whichthe Company retains net for its own account shall be included.

B.                        Theamount of the Reinsurer’s liability hereunder in respect of any loss or lossesshall not be increased by reason of the inability of the Company to collectfrom any other reinsurer(s), whether specific or general, any amounts which mayhave become due from such reinsurer(s), whether such inability arises from theinsolvency of such other reinsurer(s) or otherwise.

**Article XVII - Errors and Omissions (BRMA 14F)**

Inadvertent delays, errors or omissions made in connection with thisContract or any transaction hereunder shall not relieve either party from anyliability which would have attached had such delay, error or omission notoccurred, provided always that such error or omission is rectified as soon aspossible after discovery.

**Article XVIII - Currency (BRMA 12A)**

A.                      Wheneverthe word “Dollars” or the $ sign appears in this Contract, they shall beconstrued to mean United States Dollars and all transactions under thisContract shall be in United States Dollars.

B.                        Amountspaid or received by the Company in any other currency shall be converted toUnited States Dollars at the rate of exchange at the date such transaction isentered on the books of the Company.

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**Article XIX - Taxes (BRMA 50B)**

In consideration of the terms under which this Contract is issued, theCompany will not claim a deduction in respect of the premium hereon when makingtax returns, other than income or**profitstax returns, to any state or territory of the United States of America or theDistrict of Columbia.

**Article XX - Federal Excise Tax**

A.                      TheReinsurer has agreed to allow for the purpose of paying the Federal Excise Taxthe applicable percentage of the premium payable hereon as imposed underSection 4371 of the Internal Revenue Code to the extent such premium is subjectto the Federal Excise Tax.

B.                        Inthe event of any return of premium becoming due hereunder the Reinsurer willdeduct the applicable percentage from the return premium payable hereon and theCompany or its agent should take steps to recover the tax from the UnitedStates Government.

**Article XXI - Unauthorized Reinsurers**

A.                      Ifthe Reinsurer is unauthorized in any state of the United States of America orthe District of Columbia, the Reinsurer agrees to fund its share of the Company’sceded United States outstanding loss and loss adjustment expense reserves(including all case reserves plus any reasonable amount estimated to beunreported from known loss occurrences) by:

1.                         Clean,irrevocable and unconditional letters of credit issued and confirmed, ifconfirmation is required by the insurance regulatory authorities involved, by abank or banks meeting the NAIC Securities Valuation Office credit standards forissuers of letters of credit and acceptable to said insurance regulatoryauthorities; and/or

2.                         Escrowaccounts for the benefit of the Company; and/or

3.                         Cashadvances;

if, without such funding, a penalty would accrue to the Company on anyfinancial statement it is required to file with the insurance regulatoryauthorities involved. The Reinsurer, at its sole option, may fund in other thancash if its method and form of funding are acceptable to the insuranceregulatory authorities involved.

B.                        Withregard to funding in whole or in part by letters of credit, it is agreed thateach letter of credit will be in a form acceptable to insurance regulatoryauthorities involved, will be issued for a term of at least one year and willinclude an “evergreen clause,” which automatically extends the term for atleast one additional year at each expiration date unless written notice ofnon-renewal is given to the Company not less than 30 days prior to saidexpiration date. The Company and the Reinsurer further agree, notwithstandinganything to the contrary in this Contract, that said letters of credit may bedrawn upon by the Company or

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its successors in interest at any time, without diminution because ofthe insolvency of the Company or the Reinsurer, but only for one or more of thefollowing purposes:

To reimburse itself for the Reinsurer’s share oflosses and/or loss adjustment expense paid under the terms of policiesreinsured hereunder, unless paid in cash by the Reinsurer;

2.                         Toreimburse itself for the Reinsurer’s share of any other amounts claimed to bedue hereunder, unless paid in cash by the Reinsurer:

3.                         Tofund a cash account in an amount equal to the Reinsurer’s share of any cededoutstanding loss and loss adjustment expense reserves (including all casereserves plus any reasonable amount estimated to be unreported from known lossoccurrences) funded by means of a letter of credit which is under non-renewalnotice, if said letter of credit has not been renewed or replaced by theReinsurer 10 days prior to its expiration date:

4.                         Torefund to the Reinsurer any sum in excess of the actual amount required to fundthe Reinsurer’s share of the Company’s ceded outstanding loss and lossadjustment expense reserves (including all case reserves plus any reasonableamount estimated to be unreported from known loss occurrences), if so requestedby the Reinsurer.

In the event the amount drawn by the Company on any letter of credit isin excess of the actual amount required for B(1) or B(3). or in the case ofB(2), the actual amount determined to be due the Company shall promptly returnto the Reinsurer the excess amount so drawn.

**Article XXII - Insolvency**

A.                      Inthe event of the insolvency of one or both of the reinsured companies, thisreinsurance shall be payable directly to the company or to its liquidator,receiver, conservator or statutory successor on the basis of the liability ofthe company without diminution because of the insolvency of the company orbecause the liquidator, receiver, conservator or statutory successor of thecompany has failed to pay all or a portion of any claim. It is agreed, however,that the liquidator, receiver, conservator or statutory successor of thecompany shall give written notice to the Reinsurer of the pendency of a claimagainst the company indicating the policy or bond reinsured which claim wouldinvolve a possible liability on the part of the Reinsurer within a reasonabletime after such claim is filed in the conservation or liquidation proceeding orin the receivership, and that during the pendency of such claim, the Reinsurermay investigate such claim and interpose, at its own expense, in the proceedingwhere such claim is to be adjudicated, any defense or defenses that it may deemavailable to the company or its liquidator, receiver, conservator or statutorysuccessor. The expense thus incurred by the Reinsurer shall be chargeable,subject to the approval of the Court, against the company as part of theexpense of conservation or liquidation to the extent of a pro rata share of thebenefit which may accrue to the company solely as a result of the defenseundertaken by the Reinsurer.

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B.                        Wheretwo or more reinsurers are involved in the same claim and a majority ininterest elect to interpose defense to such claim, the expense shall beapportioned in accordance with the terms of this Contract as though suchexpense had been incurred by the company.

C.                        Itis further understood and agreed that, in the event of the insolvency of one orboth of the reinsured companies, the reinsurance under this Contract shall bepayable directly by the Reinsurer to the company or to its liquidator, receiveror statutory successor, except as provided by Section 4118(a) of the New YorkInsurance Law or except (1) where this Contract specifically provides anotherpayee of such reinsurance in the event of the insolvency of the company or (2)where the Reinsurer with the consent of the direct insured or insureds hasassumed such policy obligations of the company as direct obligations of theReinsurer to the payees under such policies and in substitution for theobligations of the company to such payees.

**Article XXIII - Arbitration**

A.                      Asa condition precedent to any right of action hereunder, in the event of anydispute or difference of opinion hereafter arising with respect to this Contract,it is hereby mutually agreed that such dispute or difference of opinion shallbe submitted to arbitration. One Arbiter shall be chosen by the Company, theother by the Reinsurer, and an Umpire shall be chosen by the two Arbitersbefore they enter upon arbitration, all of whom shall be active or retireddisinterested executive officers of insurance or reinsurance companies or Lloyd’sLondon Underwriters. In the event that either party should fall to choose anArbiter within 30 days following a written request by the other party to do so,the requesting party may choose two Arbiters who shall in turn choose an Umpirebefore entering upon arbitration. If the two Arbiters fall to agree upon theselection of an Umpire within 30 days following their appointment, the twoArbiters shall request the American Arbitration Association to appoint theUmpire. If the American Arbitration Association fails to appoint the Umpirewithin 30 days after it has been requested to do so, either party may request ajustice of a Court of general jurisdiction of the state in which thearbitration is to be held to appoint the Umpire.

B.                        Eachparty shall present its case to the Arbiters within 30 days following the dateof appointment of the Umpire. The Arbiters shall consider this Contract as anhonorable engagement rather than merely as a legal obligation and they arerelieved of all judicial formalities and may abstain from following the strictrules of law. The decision of the Arbiters shall be final and binding on bothparties; but falling to agree, they shall call in the Umpire and the decisionof the majority shall be final and binding upon both parties. Judgment upon thefinal decision of the Arbiters may be entered in any court of competentjurisdiction.

C.                        Ifmore than one reinsurer is involved in the same dispute, all such reinsurersshall constitute and act as one party for purposes of this Article andcommunications shall be made by the Company to each of the reinsurersconstituting one party, provided, however, that nothing herein shall impair therights of such reinsurers to assert several, rather than joint, defenses orclaims, nor be construed as changing the liability of the reinsurersparticipating under the terms of this Contract from several to joint.

D.                       Eachparty shall bear the expense of its own Arbiter, and shall jointly and equallybear with the other the expense of the Umpire and of the arbitration. In theevent that the two

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Arbiters are chosen by one party, as above provided, the expense of theArbiters, the Umpire and the arbitration shall be equally divided between thetwo parties.

E.                         Anyarbitration proceedings shall take place at a location mutually agreed upon bythe parties to this Contract, but notwithstanding the location of thearbitration, all proceedings pursuant hereto shall be governed by the law ofthe state in which the Company has its principal office.

**Article XXIV - Service of Suit (BRMA 49C)**

(Applicable if the Reinsurer is not domiciled in the United States ofAmerica, and/or is not authorized in any State, Territory or District of theUnited States where authorization is required by insurance regulatoryauthorities)

A.                      Itis agreed that in the event the Reinsurer fails to pay any amount claimed to bedue hereunder, the Reinsurer, at the request of the Company, will submit to thejurisdiction of a court of competent jurisdiction within the United States.Nothing in this Article constitutes or should be understood to constitute awaiver of the Reinsurer’s rights to commence an action in any court ofcompetent jurisdiction in the United States, to remove an action to a UnitedStates District Court, or to seek a transfer of a case to another court aspermitted by the laws of the United States or of any state in the UnitedStates.

B.                        Further,pursuant to any statute of any state, territory or district of the UnitedStates which makes provision therefor, the Reinsurer hereby designates theparty named in its interests and Liabilities Agreement, or if no party is namedtherein, the Superintendent, Commissioner or Director of Insurance or otherofficer specified for that purpose in the statute, or his successor orsuccessors in office, as its true and lawful attorney upon whom may be servedany lawful process in any action, suit or proceeding instituted by or on behalfof the Company or any beneficiary hereunder arising out of this Contract.

**Article XXV - Agency Agreement**

If more than one reinsured company is named as a party to thisContract, the first named company shall be deemed the agent of the otherreinsured companies for purposes of sending or receiving notices required bythe terms and conditions of this Contract, and for purposes of remitting orreceiving any monies due any party.

**Article XXVI - Governing Law (BRMA 71B)**

This Contract shall be governed by and construed in accordance with thelaws of the Commonwealth of Massachusetts.

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**Article XXVII - Severability (BRMA 72E)**

If any provision of this Contract shall be rendered illegal orunenforceable by the laws, regulations or public policy of any state, suchprovision shall be considered void in such state, but this shall not affect thevalidity or enforceability of any other provision of this Contract or theenforceability of such provision in any other jurisdiction.

**Article XXVIII - Intermediary (BRMA 23A)**

Benfield Inc. is hereby recognized as the Intermediary negotiating thisContract for all business hereunder. All communications (including but notlimited to notices, statements, premium, return premium, commissions, taxes,losses, loss adjustment expense, salvages and loss settlements) relatingthereto shall be transmitted to the Company or the Reinsurer through BenfieldInc. Payments by the Company to the Intermediary shall be deemed to constitutepayment to the Reinsurer. Payments by the Reinsurer to the Intermediary shallbe deemed to constitute payment to the Company only to the extent that suchpayments are actually received by the Company.

In Witness Whereof, the Company by its duly authorized representativehas executed this Contract as of the date undermentioned at:

Boston, Massachusetts, this 9th day of Jan in the year 2006.
|        |   |   |   | /s/ Illegible                      |
|--------|--------|--------|--------|------------------------------------|
|   |   |   |   | Safety Insurance Company           |
|   |   |   |   | Safety Indemnity Insurance Company |

 

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**ScheduleA**

**PropertyExcess of Loss**

**ReinsuranceContract**

**Effective:January 1, 2006**

issued to

Safety InsuranceCompany

and

Safety IndemnityInsurance Company

both of Boston,Massachusetts
| ** **                             | ** ** | **First  Excess** | ** ** | **Second  Excess** | ** ** | **Third  Excess** | ** ** |
|----------------------------------------|------------|-------------------|------------|--------------------|------------|-------------------|------------|
| Company’s Retention               |       | $                 | 1,500,000  |               | $          | 2,500,000         |       | $ | 5,000,000 |   |
|                                   |       |              |       |               |       |              |       |
| Reinsurer’s Per Risk  Limit       |       | $                 | 1,000,000  |               | $          | 2,500,000         |       | $ | 10,000,000 |   |
|                                   |       |              |       |               |       |              |       |
| Reinsurer’s Per  Occurrence Limit |       | $                 | 2,000,000  |               | $          | 5,000,000         |       | $ | 10,000,000 |   |
|                                   |       |              |       |               |       |              |       |
| Reinsurer’s Term Limit            |       | $                 | 4,000,000  |               | $          | 7,500,000         |       | $ | 20,000,000 |   |
|                                   |       |              |       |               |       |              |       |
| Premium Rate                           |       | 0.194             | %          | 0.2323             | %          | 0.3872            | %          |
|                                   |       |              |       |               |       |              |       |
| Annual Minimum and  Deposit Premium    |       | $                 | 100,000    |               | $          | 120,000           |       | $ | 200,000 |   |
|                                   |       |              |       |               |       |              |       |
| Quarterly Minimum and Deposit Premium  |       | $                 | 25,000     |               | $          | 30,000            |       | $ | 50,000 |   |

 

The figures listed above for each excess layer shall apply to eachSubscribing Reinsurer in the percentage share for that excess layer asexpressed in its Interests and Liabilities Agreement attached hereto.

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**NuclearIncident Exclusion Clause - Physical Damage - Reinsurance (U.S.A.)**

1.                          ThisReinsurance does not cover any loss or liability accruing to the Reassured,directly or indirectly and whether as Insurer or Reinsurer, from any Pool ofInsurers or Reinsurers formed for the purpose of covering Atomic or NuclearEnergy risks.

2.                          Withoutin any way restricting the operation of paragraph (1) of this Clause, thisReinsurance does not cover any loss or liability accruing to the Reassured,directly or indirectly and whether as Insurer or Reinsurer, from any insuranceagainst Physical Damage (including business interruption or consequential lossarising out of such Physical Damage) to:

Nuclear reactor power plants including all auxilliaryproperty on the site, or

Any other nuclear reactor installation, includinglaboratories handling radioactive materials in connection with reactorinstallations, and “critical facilities” as such, or

III.                   Installationsfor fabricating complete fuel elements or for processing substantial quantitiesof “special nuclear material,” and for reprocessing, salvaging, chemicallyseparating, storing or disposing of “spent” nuclear fuel or waste materials, or

IV.                   Installationsother than those listed in paragraph (2) III above using substantial quantitiesof radioactive isotopes or other products of nuclear fission.

3.                          Withoutin any way restricting the operations of paragraphs (1) and (2) hereof, this Reinsurance does not cover any lossor liability by radioactive contamination accruing to the Reassured, directlyor indirectly, and whether as Insurer or Reinsurer, from any insurance onproperty which is on the same site as a nuclear reactor power plant or othernuclear installation and which normally would be insured therewith except thatthis paragraph (3) shall not operate

(a)                    whereReassured does not have knowledge of such nuclear reactor power plant ornuclear installation, or

(b)                   wheresaid insurance contains a provision excluding coverage for damage to propertycaused by or resulting from radioactive contamination, however caused. Howeveron and after 1st January 1960 this sub-paragraph (b) shall only apply providedthe said radioactive contamination exclusion provision has been approved by theGovernmental Authority having jurisdiction thereof.

4.                          Withoutin any way restricting the operations of paragraphs (1), (2) and (3) hereof,this Reinsurance does not cover any loss or liability by radioactivecontamination accruing to the Reassured, directly or indirectly, and whether asInsurer or Reinsurer, when such radioactive contamination is a named hazardspecifically insured against.

5.                          Itis understood and agreed that this Clause shall not extend to risks usingradioactive isotopes in any form where the nuclear exposure is not consideredby the Reassured to be the primary hazard.

6.                          Theterm “special nuclear material” shall have the meaning given it in the AtomicEnergy Act of 1954 or by any law amendatory thereof.

7.                          Reassuredto be sole judge of what constitutes:

(a)                    substantialquantities, and

(b)                   theextent of installation, plant or site

*Note.*-Without in any way restrictingthe operation of paragraph (1) hereof, it is understood and agreed that

(a)                    allpolicies issued by the Reassured on or before 31st December 1957 shall be freefrom the application of the other provisions of this Clause until expiry dateor 31st December 1960 whichever first occurs whereupon all the provisions ofthis Clause shall apply.

(b)                   withrespect to any risk located in Canada policies issued by the Reassured on orbefore 31st December 1958 shall be free from the application of the other provisionsof this Clause until expiry date or 31st December 1960 whichever first occurswhereupon all the provisions of this Clause shall apply.

12/12/57

N.M.A. 1119

BRMA 36B

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**TotalInsured Value Exclusion Clause**

It is the mutual intention of the parties to exclude risks, other thanOffices, Hotels, Apartments, Hospitals, Educational Establishments and PublicUtilities (except Railroad Schedules), and Builders Risks on the above classes,where at the time of cession, the Total Insured Value over all interests exceeds$250,000,000. However, the Company shall be protected hereunder, subject to theother terms and conditions of this Contract, if subsequent to cession beingmade, the Company becomes acquainted with the true facts of the case anddiscovers that the mutual intention has been inadvertently breached; oncondition that the Company shall at the first opportunity, and certainly bynext anniversary of the original policy, exclude the risk in question.

It is agreed that this mutual intention does not apply to ContingentBusiness Interruption or to interests traditionally underwritten as InlandMarine or to Stock and/or Contents written on a blanket basis except where theCompany is aware that the Total Insured Value of $250,000,000 is alreadyexceeded for buildings, machinery, equipment and direct use and occupancy atthe key location.

It is understood and agreed that this Clause shall not apply hereunderwhere the Company writes 100% of the risk.

BRMA 53B

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**TerrorismExclusion Clause**

A.                      Notwithstandingany provision to the contrary within this Contract or any addendum thereto, itis agreed that this Contract excludes loss, damage, cost or expense directly orindirectly caused by, contributed to by, resulting from, arising out of or inconnection with any “act of terrorism,” as defined in the Terrorism RiskInsurance Act of 2002, as amended by the Terrorism Risk Insurance Extension Actof 2005 (together the “Terrorism Act”), on primary or excess property andcasualty insurance issued by the Company, regardless of any other cause orevent contributing concurrently or in any sequence to the loss.

B.                        Notwithstandingthe above and subject otherwise to the terms, conditions and limitations ofthis Contract, this Contract will pay actual loss or damage caused by any actof terrorism which does not meet the definition of “insured loss” set forth inthe Terrorism Act or meets the definition of “insured loss” as set forth in theTerrorism Act, but results in loss under a policy that is not included in “propertyand casualty insurance” as defined in the Terrorism Act, provided, in eithercase, (1) such loss or damage occurs in a line of insurance otherwise coveredby this Contract, and (2) in no event will this Contract provide coverage forloss, damage, cost or expense directly or indirectly caused by, contributed toby, resulting from, or arising out of or in connection with biological,chemical, radioactive or nuclear explosion, pollution, contamination and/orfire following thereon.

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